Chapter 6 Chapter 6 — Compulsory winding-up
199. Circumstances in which a company may be wound up by the court
A Company may be wound up by the Court if —(a) the Company has by Special Resolution resolved that the Company be wound up by the Court;(b) the Company is unable to pay its debts;(c) the Court may make such an order pursuant to any provision of or under Abu Dhabi Global Market legislation; or(d) the Court is of the opinion that it is just and equitable that the Company should be wound up.
200. Definition of inability to pay debts(1) A Company is deemed unable to pay its debts —(a) if a creditor to whom the Company is indebted in a sum exceeding $2,000 then due has served on the Company a written demand, by leaving it at the Company's registered office, requiring the Company to pay the sum so due and the Company has for three (3) weeks thereafter neglected to pay the sum or to agree terms in relation to its payment to the reasonable satisfaction of the creditor;(b) if execution or other process issued on a judgment, decree or order of any Court in favour of a creditor of the Company is returned unsatisfied in whole or in part; or(c) if it is proved to the satisfaction of the Court that the Company is unable to pay its debts as they fall due.(2) A Company is also deemed unable to pay its debts if it is proved to the satisfaction of the Court that the value of the Company's current assets is less than the amount of its current liabilities, taking into account its contingent and prospective liabilities.(3) The money sum for the time being specified in subsection (1) is subject to increase or reduction by these Regulations; but no increase in the sum so specified affects any case in which the winding-up petition was presented before the coming into force of the increase.
201. The statutory demand(1) A written demand served by a creditor on a Company under Section 200(1)(a) (Definition of inability to pay debts) of these Regulations is known in winding-up proceedings as a "statutory demand".(2) The statutory demand must be dated, and be signed either by the creditor himself or by a person stating himself to be authorised to make the demand on the creditor's behalf.(3) The statutory demand must include the following —(a) the amount of the debt and the way in which it arises;(b) an explanation of the purpose of the demand, and the fact that, if the demand is not complied with, proceedings may be instituted for the winding-up of the Company;(c) information as to how the debt may be paid and the time within which it must be complied with;(d) a statement that the Company has the right to make an application to the Court for an injunction restraining the creditor from presenting or advertising a petition for the winding-up of the Company; and(e) information as to the identity of a person whom the Company can contact to secure or compound the debt to the creditor's satisfaction, including an address and telephone number.
202. Application for winding-up(1) Subject to any provision of Abu Dhabi Global Market legislation to the contrary, a petition to the Court for the winding-up of a Company may only be presented by the Company, or the Directors, or by any creditor or creditors (including any contingent or prospective creditor or creditors) or by a contributory or contributories.(2) A contributory is not entitled to present a winding-up petition unless either —(a) the shares in respect of which he is a contributory, or some of them, either were originally allotted to him, or have been held by him, and registered in his name, for at least six (6) months during the 18 months before the commencement of the winding-up, or have devolved on him through the death of a former holder; or(b) he is a person who is liable under Section 221 (Liability to contribute of past and present members) to contribute to a Company's assets in the event of its being wound up; but in such a case, he may only petition on either of the grounds set out in Section 199(b) and (d) (Circumstances in which a Company may be wound up by the Court).
203. Petition for winding-up by the Financial Services Regulator
The Financial Services Regulator may present a petition to the Court for a Company to be wound up if the Financial Services Regulator is of the opinion that —(a) the Company is unable to pay its debts;(b) it is just and equitable that the Company should be wound up;(c) the Company has committed a serious contravention of any regulation of the Abu Dhabi Global Market; or(d) it is expedient in the interests of the Abu Dhabi Global Market that the Company should be wound up.
204. Presentation and service of petition(1) A winding-up order may be made by the Court upon the presentation by any relevant person of a petition.(2) The petition shall be filed in Court and served on the Company at its registered office (if the petitioner is not the Company).(3) If the Company is a person authorised under the Financial Market Regulations and the petitioner is not the Financial Services Regulator, one copy must be sent by the petitioner to the Financial Services Regulator.(4) If any Office-holder has been appointed in respect of the assets of the Company or any of them, a copy of the petition shall be sent by the petitioner to such Office-holder.(5) If the Company intends to oppose the petition, it must notify the Court of this fact not less than seven (7) days before the date fixed for the hearing.(6) Where a petition is filed at the instance of a Company's administrator the petition shall —(a) be expressed to be the petition of the Company by its administrator;(b) state the name of the administrator, the Court case number and the date that the Company entered administration; and(c) where applicable, contain an application under Section 113 (Court ending administration on application of administrator), requesting that the appointment of the administrator shall cease to have effect.(7) Where a petition contains a request for the appointment of a person as liquidator in accordance with Section 210(3) (Appointment of provisional liquidator or of liquidator following administration) the person whose appointment is sought shall, not less than two (2) business days before the return day for the petition, file in Court a report including particulars of —(a) a date on which he notified creditors of the Company, either in writing or at a meeting of creditors, of the intention to seek his appointment as liquidator, such date to be at least seven (7) business days before the day on which the report under this paragraph is filed; and(b) details of any response from creditors to that notification, including any objections to his appointment.
205. Advertisement of petition(1) The petition shall be published in the Abu Dhabi Global Market in such manner as directed by the Court, not less than seven (7) business days after service of the petition on the Company.(2) The notice must state —(a) that a petition has been presented for the winding-up of the Company;(b) the name and address of the petitioner;(c) the date on which the petition was presented;(d) the venue fixed for the hearing of the petition;(e) the name and address of the petitioner's legal representatives (if any); and(f) that any person intending to appear at the hearing (whether to support or to oppose the petition) must give the petitioner notice of that intention, no later than 16:00 hours on the business day before the day appointed for the hearing.
206. Powers of Court on hearing of petition(1) On hearing a winding-up petition the Court may dismiss it, or adjourn the hearing conditionally or unconditionally, or make an interim order, or any other order that it thinks fit.(2) Where the Court orders that the Company be wound up, the Court shall identify in the winding-up order the person who is to act as liquidator of the Company, and that person shall take office immediately upon the order being made.
207. Notice of winding-up order(1) When a winding-up order has been made, the Court shall immediately give notice of the fact to the Company, the petitioner, the Financial Services Regulator (in the case of a person authorised under the Financial Market Regulations) and any other person represented at the hearing of the petition.(2) On the making of a winding-up order, the liquidator must within seven (7) days —(a) send a copy of the order to the Registrar; and(b) publish notice of the order in the Abu Dhabi Global Market in such manner as he thinks fit.(3) If a liquidator fails without reasonable excuse to comply with subsection (2) he commits a contravention and is liable to a fine at the relevant level set out in the Fines Schedule.
208. Commencement of winding-up(1) If, before the presentation of a petition for the winding-up of a Company by the Court, a resolution has been passed by the Company for voluntary winding-up, the winding-up of the Company is deemed to have commenced at the time of the passing of the resolution; and unless the Court, on proof of fraud or mistake, directs otherwise, all proceedings taken in the voluntary winding-up are deemed to have been validly taken.(2) Where the Court makes a winding-up order by virtue of Section 18(1)(e) (Powers of Court), the winding-up is deemed to commence on the making of the order.(3) In any other case, the winding-up of a Company by the Court is deemed to commence at the time of the presentation of the petition for the winding-up.
209. Consequences of winding-up order(1) When a winding-up order has been made or a provisional liquidator has been appointed, no action or proceeding shall be proceeded with or commenced against the Company or its property, except by leave of the Court and subject to such terms as the Court may impose.(2) After the presentation of a winding-up petition —(a) no person may attach, sequester or otherwise appropriate the assets of the Company, and any such activity is, unless the Court otherwise orders, void; and(b) any disposition of the Company's property, and any transfer of shares, or alteration in the status of the Company's members is, unless the Court otherwise orders, void,except that this subsection (2) shall only take effect if a winding-up order is made in respect of the Company on the winding-up petition and subsection (2)(b) has no effect in respect of anything done by an administrator of a Company while a winding-up petition is suspended under Section 42(1)(b) (Dismissal of pending winding-up petition).
210. Appointment of provisional liquidator or of liquidator following administration(1) The Court may, at any time after the presentation of a winding-up petition, appoint a liquidator provisionally to carry on such functions as the Court may confer on him. The powers of such a liquidator may be limited by the order appointing him.(2) When a provisional liquidator has been appointed, no action or proceeding shall be proceeded with or commenced against the Company or its property, except by leave of the Court and subject to such terms as the Court may impose.(3) Where a winding-up order is made immediately upon the appointment of an administrator ceasing to have effect, the Court may appoint as liquidator of the Company the person whose appointment as administrator has ceased to have effect.(4) Where a liquidator is appointed in accordance with subsection (3) or upon registration of a notice under Section 122(2) (Moving to creditors' voluntary liquidation) and that person becomes aware of creditors not formerly known to him in his capacity as administrator, he shall send to those creditors a copy of any statement or report sent by him to creditors under Section 56 (Administrator's proposals), so noted as to indicate that it is being sent under this Section.
211. Power to stay winding-up(1) The Court may at any time after an order for winding-up is made, on the application of the liquidator or any creditor or contributory, make an order staying the proceedings on such terms and conditions as the Court thinks fit.(2) The Company must, as soon as reasonably practicable, forward a copy of any order made under subsection (1) to the Registrar.(3) If the Company fails to comply with subsection (2), it commits a contravention and is liable to a fine at the relevant level set out in the Fines Schedule.
212. Progress report to contributories and creditors(1) If the winding-up of the Company continues for more than one (1) year, the liquidator must, within two (2) months after the end of twelve (12) months commencing on the date on which the liquidator is appointed, and after every subsequent twelve (12) months until the liquidator ceases to act —(a) produce a progress report providing an account of his acts and dealings, and of the conduct of the winding-up, during the preceding year; and(b) send a copy of the progress report to contributories and creditors of the Company and to the Registrar.(2) If the liquidator fails to comply with subsection (1), he commits a contravention and is liable to a fine at the relevant level set out in the Fines Schedule.
213. Duty to summon final meeting(1) If it appears to the liquidator of a Company that the winding-up of the Company is for practical purposes complete, the liquidator must summon a final meeting of the Company's creditors to receive the liquidator's report of the winding-up.(2) Notice of the meeting shall be published in the Abu Dhabi Global Market in such manner as the liquidator thinks appropriate, specifying the time, place and object of the meeting and published at least one (1) month before it.(3) Within seven (7) days of the meeting, the liquidator shall send to the Registrar a copy of the liquidator's report and a return of the meeting.(4) If the copy is not sent or the return is not made in accordance with subsection (3), the liquidator commits a contravention and is liable to a fine at the relevant level set out in the Fines Schedule.