WINDING-UP AND DISSOLUTION OF BUSINESS AND NON-BUSINESS ORGANIZATION IN NIGERIA: PRINCIPLES ANDPROCEDURE
By Akin Olawale Ogundayis LL.B, B.L, ACIArb.
Winding up is the process whereby the company is liquidated and dissolved and itsassets administered for the benefit of creditors, members and employees. The winding-up process terminates the corporate identity of a company and all its attribute of perpetual succession, which is one of the ways to dissolve a registered company underthe Act. Upon winding-up of a company or the appointment of liquidator, it does notexist any longer except for a just cause.It should be noted that a company wound-up is not dead for it is still alive; it only dieson dissolution. See
C. S. (Nig.) Plc v. Mbakwe (2002) 3 NWLR (Pt. 755) 523 at 527
During the winding-up process, the assets of the company are realized,sold and applied to pay off its debts and whatever is left as the surplus is distributed tothe shareholders in accordance with the provisions of the memorandum and articles of association.
The terms “winding
up” and “liquidation” are usually regarded as being synonymous
and are consequently used interchangeably. In
Musa v. Ehidiamhen (1994) 3 NWLR (Pt. 334) 544,
it was stated that both terms refer to the process whereby an
end is put to the “life” of a company and its property administered for the benefit of its
creditors and members.
JURISDICTION OF COURT
The Federal High Court has jurisdiction to wind up a company. This is becauseCompanies and Allied Matters form part of the items under section 251(1) of 1999Constitution (as amended), which is exclusive of the court. There are certaincircumstances where by administrative institutions or corporations established by laware vested with certain responsibilities in the winding up process. For example, in the