Division 26: Winding up a company

Preliminary

292. Mode of winding up

(a)The winding up of a company may be either:

(i) by the Court;

(ii)voluntary; or

(iii)subject to the supervision of the Court.

(b)The provisions of this Law with respect to winding up apply, unless the contrary appears, to the winding up of a company in any of these modes.

Contributories

293. Liability as contributories of present and past members

(a)In the event of a company being wound up, every present and past member shall, subject to the provisions of this section, be liable to contribute to the assets of the company to an amount sufficient for payment of its debts and liabilities and the costs, charges and expenses of the winding up, and for the adjustment of the rights of the contributories among themselves, with the qualifications following (that is to say):

(i)a past member shall not be liable to contribute if he has ceased to be a member for one year or upwards before the commencement of the winding up;

(ii)a past member shall not be liable to contribute in respect of any debt, or liability of the company contracted after he ceased to be a member;

(iii)a past member shall not be liable to contribute unless it appears to the Court that the existing members are unable to satisfy the contributions required to be made by them in pursuance of this Law;

(iv)in the case of a company limited by shares, no contribution shall be, required from any member exceeding the amount (if any) unpaid on the shares in respect to which he is liable as a present or past member;

(v) in the case of a company limited by guarantee, no contribution shall be required from any member exceeding the amount undertaken to be contributed by him to the assets of the company in the event of its being wound up;

(vi)nothing in this Law shall invalidate any provision contained in any policy of insurance or other contract whereby the liability of individual members on the policy or contract is restricted, or whereby the funds of the company are alone made liable in respect of the policy or contract;

(vii)a sum due to any member of a company in his character of a member, by way of dividends, profits or otherwise, shall not be deemed to be a debt of the company

payable to that member in a case of competition between himself and any other creditor not a member of the company; but any such sum maybe taken into account for the purpose of the final adjustments of the rights of the contributories among themselves.

(b)In the winding up of a company limited by guarantee which has a share capital, every member of the company shall be liable, in addition to the amount undertaken to be contributed by him to the assets of the company in the event of its being wound up, to contribute to the extent of any sums unpaid on any shares held by him.

294.Liability of directors whose liability is unlimited

In the winding up of a limited company any director, whether past or present, whose liability is, in pursuance of this Law or under the constitution of the company, unlimited, shall, in addition to his liability (if any) to contribute as an ordinary member, be liable to make a further contribution as if he were at the commencement of the winding up a member of an unlimited company:

Provided that:

(a)a past director shall not be liable to make such further contribution if he has ceased to hold office for a year or upwards before the commencement of the winding up;

(b)a past director shall not be liable to make such further contribution in respect of any debt or liability of the company contracted after he ceased to hold office;

(c)subject to the constitution of the company a director shall not be liable to make such further contribution unless the Court deems it necessary to require that contribution in order to satisfy the debts and liabilities of the company, and the costs, charges and expenses of the winding up.

295. Nature of liability of contributory

The liability of a contributory shall create a debt payable at the time specified in the calls made on him by the liquidator.

296. Contributories in case of death of member

(a)If a contributory dies either before or after he has been placed on the list of contributories, his legal representatives and his heirs shall be liable in a due course of administration to contribute to the assets of the company in discharge of his liability and shall be contributories accordingly.

(b)If the legal representatives or heirs make default in paying any money ordered to be paid by them, proceedings may be taken for administering the property of the deceased contributory, whether moveable or immoveable, or both and of compelling payment thereout of the money due.

297. Contributories in case of insolvency of member

If a contributory is adjudged insolvent either before or after he has been placed on the list of contributories, then:

(a)his assignees shall represent him for all the purposes of the winding up, and shall be contributories accordingly, and may be called on to admit to proof against the estate of the insolvent, or otherwise to allow to be paid out of his assets in due course of law, any

money due from the insolvent in respect of his liability to contribute to the assets of the company; and

(b)there may be proved against the estate of the insolvent the estimated value of his liability to future calls as well as calls already made.

Winding up by Court

298.Circumstances in which company may be wound up by Court

A company may be wound up by the Court:

(a)if the company has by special resolution resolved that the company be wound up by the Court;

(b)if default is made in filing the statutory report or in holding the statutory meeting;

(c)if the company does not commence its business within a year from its incorporation, or suspends its business for a whole year;

(d)if the number of members is reduced below one;

(e)if the company is unable to pay its debts; or

(f)if the Court is of opinion that it is just and equitable that the company should be wound up.

299. Company when deemed unable to pay its debts

(a)For the purpose of this Division, a company shall be deemed to be unable to pay its debts:

(i)if a creditor, by assignment or otherwise, to whom the company is indebted in a sum exceeding 500,000 kyats, has served on the company, by causing the same to be delivered by registered post or otherwise at its registered office, a demand under his hand requiring the company to pay the sum so due and the company has for three weeks thereafter neglected to pay the sum, or to secure or compound for it to the reasonable satisfaction of the creditor;

(ii)if execution or other process issued on a decree or order of any Court in favour of a creditor of the company is returned unsatisfied in whole or in part; or

(iii)if it is proved to the satisfaction of the Court that the company is unable to pay its debts and, in determining whether a company is unable to pay its debts, the Court shall take into account the contingent and prospective liabilities of the company.

(b)The demand referred to in clause (i) of sub-section (a) shall be deemed to have been duly given under the hand of the creditor if it is signed by an agent or lawyer duly authorized on his behalf, or in the case of a firm if it is signed by such agent or by a lawyer or any one member of the firm on behalf of the firm.

300. Winding up maybe referred to Lower Courts

Where a Court makes an order for winding up a company under this Law, it may, if it thinks fit, direct all subsequent proceedings to be had in a lower Court; and thereupon such Court shall, for the purpose of winding up the company, be deemed to be “the Court” within the meaning of this

Law, and shall have, for the purposes of such winding up, all the jurisdiction and powers of the fore mentioned Court.

301. Transfer of winding up from one Court to another

If during the progress of a winding up in a Court it is made to appear to the Court that the same could be more conveniently prosecuted in any other Court having jurisdiction to wind up companies, the Court may transfer the same to such other Court, and thereupon the winding up shall proceed in such other Court.

302. Provisions as to applications for winding up

An application to the Court for the winding up of a company shall be by petition presented, subject to the provisions of this section, either by the company, or by any creditor or creditors (including any contingent or prospective creditor or creditors), contributory or contributories, or by all or any of those parties, together or separately, or by the Registrar:

Provided that:

(a)a contributory shall not be entitled to present a petition for winding up a company unless 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 months during the eighteen months before the commencement of the winding up, or have devolved on him through the death of a former holder;

(b)the Registrar shall not be entitled to present a petition for winding up a company:

(i)except on the ground that from the financial condition of the company as disclosed in its balance-sheet or from the report of an inspector appointed under section 271 it appears that the company is unable to pay its debts, and

(ii)unless the previous sanction of the Union Minister has been obtained to the presentation of the petition, provided that no such sanction shall be given unless the company has first been afforded an opportunity of being heard;

(c)a petition for winding up a company on the ground of default in filing the statutory report or in holding the statutory meeting shall not be presented by any person except a shareholder, nor before the expiration of 14 days after the last day on which the meeting ought to have been held;

(d)the Court shall not give a hearing to a petition for winding up a company by a contingent or prospective creditor until such security for costs has been given as the Court thinks reasonable and until a prima facie case for winding up has been established to the satisfaction of the Court.

303. Effect of winding up order

An order for winding up a company shall operate in favour of all the creditors and of all the contributories of the company as if made on the joint petition of a creditor and of a contributory.

304. Commencement of winding up by Court

A winding up of a company by the Court shall be deemed to commence at the time of the presentation of the petition for the winding up.

305. Court may grant injunction

The Court may, at any time after the presentation of the petition for winding up a company under this Law, and before making an order for winding up the company, upon the application of the company or of any creditor or contributory of the company, restrain further proceedings in any suit or proceeding against the company, upon such terms as the Court thinks fit.

306.Powers of Court on hearing petition

(a)On hearing the petition the Court may dismiss it with or without costs, or adjourn the hearing conditionally or unconditionally, or make any interim order or any other order that it deems just, but the Court shall not refuse to make a winding up order on the ground only that the assets of the company have been mortgaged to an amount equal to or in excess of those assets, or that the company has no assets.

(b)Where the petition is presented on the ground of default in filing the statutory report or in holding the statutory meeting, the Court may order the costs to be paid by any persons who, in the opinion of the Court, are responsible for the default.

(c)Where the Court makes an order for the winding up of a company it shall, except where a liquidator is appointed simultaneously, forthwith cause intimation thereof to be sent to the official receiver.

307. Suits stayed on winding up order

When a winding up order has been made or a provisional liquidator has been appointed no suit or other legal proceeding shall be proceeded with or commenced against the company except by leave of the Court, and subject to such terms as the Court may impose.

308. Vacancy in the office of liquidator

(a)For the purposes of this Law, so far as it relates to the winding up of companies by the Court, the term “official receiver” means the official receiver attached to the Court, or, if there is no such official receiver, then such person as the Union Minister may, by notification in the Gazette, appoint for the purpose.

(b)On the making of a winding up order, the official receiver shall become the official liquidator of the company and shall continue to act as such until his further continuance is terminated by an order of the Court.

(c)The official receiver shall as such official liquidator forthwith take into his custody and control all the books, documents and the assets of the company.

(d)The official receiver shall be entitled to such remuneration as the Court shall fix.

309. Copy of winding up order to be filed with Registrar

(a)On the making of a winding up order it shall be the duty of the petitioner in the winding up proceedings and of the company to file with the Registrar a copy of the order within a month from the date of the making of the order.

(b)On the filing of a copy of a winding up order, the Registrar shall make a minute thereof in his books relating to the company, and shall notify in the Gazette that such an order has been made.

(c)Such order shall be deemed to be notice of discharge to the servants of the company, except when the business of the company is continued.

310. Power of Court to stay winding up

The Court may at any time after an order for winding up, on the application of any creditor or contributory, and on proof to the satisfaction of the Court that all proceedings in relation to the winding up ought to be stayed, make an order staying the proceedings, either altogether or for a limited time, on such terms and conditions as the Court thinks fit.

311. Court may have regard to wishes of creditors or contributories

The Court may, as to all matters relating to a winding up, have regard to the wishes of the creditors or contributories as proved to it by any sufficient evidence.

Official Liquidators

312. Appointment of official liquidator

(a)For the purpose of conducting the proceedings in winding up a company and performing such duties in reference thereto as the Court may impose, the Court may appoint a person or persons other than the official receiver to be called an official liquidator or official liquidators.

(b)The Court may make such an appointment provisionally at any time after the presentation of a petition and before the making of an order for winding up, but shall before making any such appointment give notice to the company, unless for reasons to be recorded it thinks fit to dispense with notice.

(c)If more persons than one are appointed to the office of official liquidator, the Court shall declare whether any act by this Law required or authorized to be done by the official liquidator is to be done by all or any one or more of such persons.

(d)The Court may determine whether any, and what, security is to be given by any official liquidator on his appointment.

(e)The acts of an official liquidator shall be valid notwithstanding any defect that may afterwards be discovered in his appointment: Provided that nothing in this sub-section shall be deemed to give validity to acts done by an official liquidator after his appointment has been shown to be invalid.

(f) A receiver shall not be appointed of assets in the hands of an official liquidator.

313.Resignations, removals, filling up vacancies and compensation

(a)Any official liquidator may resign or be removed by the Court on due cause shown.

(b)Any vacancy in the office of an official liquidator appointed by the Court shall be filled up by the Court and until the vacancy is so filled up the official receiver shall be and act as the official liquidator.

(c)There shall be paid to the official liquidator such salary or remuneration, by way of percentage or otherwise, as the Court may direct; and, if more liquidators than one are appointed, such remuneration shall be distributed amongst them in such proportions as the Court directs.

314. Official liquidator

The official liquidator shall be described by the style of the official liquidator of the particular company in respect of which he is appointed, and not by his individual name.

315. Statement of affairs to be made to the liquidator

(a)Where the Court has made a winding up order or appointed an official liquidator provisionally, there shall, unless the Court thinks fit to order otherwise and so orders, be made out and submitted to the official liquidator a statement as to the affairs of the company verified by an affidavit and containing the following particulars, namely:

(i)the assets of the company, stating separately the cash balance in hand and at the bank, if any;

(ii)the debts and liabilities;

(iii)the names, residences and occupations of the creditors, stating separately the amount of secured debts and unsecured debts, and in the case of secured debts particulars of the securities, their value and the dates when they were given; and

(iv)the debts due to the company and the names, residences and occupations of the persons from whom they are due and the amount likely to be realised therefrom.

(b)The statement shall be submitted and verified by one or more of the persons who are at the relevant date the directors and by any person who is at that date the secretary of the company, or by such of the persons hereinafter in this sub-section mentioned as the official liquidator, subject to the direction of the Court, may require to submit and verify the statement, that is to say, persons:

(i) who are or have been directors or officers of the company;

(ii)who have taken part in the formation of the company at any time within one year before the relevant date; or

(iii)who are in the employment of the company or have been in the employment of the company within the said year, and are in the opinion of the official liquidator capable of giving the information required.

(c)The statement shall be submitted within 21 days from the relevant date, or within such extended time as the official liquidator or the Court may for special reasons appoint.

(d)Any person making or concurring in making the statement and affidavit required by this section shall be allowed, and shall be paid by the official liquidator or provisional liquidator, as the case may be, out of the assets of the company, such costs and expenses incurred in and about the preparation and making of the statement and affidavit as the official liquidator may consider reasonable, subject to an appeal to the Court.

(e)Any person stating himself in writing to be a creditor or contributory of the company shall be entitled by himself or by his agent at all reasonable times, on payment of the prescribed fee, to inspect the statement submitted in pursuance of this section, and to a copy thereof or extract therefrom.

(f)For the purposes of this section, “relevant date” means, in a case where a provisional liquidator is appointed, the date of his appointment, and, in a case where no such appointment is made, the date of the winding up order.

316. If any person, without reasonable excuse, knowingly and wilfully makes default in complying with the requirements of section 315, he shall be liable to a fine of 1,000,000 kyats.

317.Any person untruthfully so stating himself to be a creditor or contributory shall be guilty of an offence under section 182 of the Penal Code and shall, on the application of the liquidator or of the official receiver, be punishable accordingly.

318. Statement by liquidator

(a)In a case where a winding up order is made, the official liquidator shall, as soon as practicable after receipt of the statement to be submitted under section 315, and not later than four, or with the leave of the Court, six months from the date of the order, or in a case where the Court orders that no statement shall be submitted, as soon as practicable after the date of the order, submit a preliminary report to the Court:

(i)as to the amount of capital issued, subscribed, and paid up, and the estimated amount of assets and liabilities, giving separately under the heading of assets particulars of:

(A)cash and negotiable securities;

(B)debts due from contributories;

(C)debts due to and securities, if any, available to the company;

(D)moveable and immoveable properties belonging to the company; and

(E)unpaid calls;

(ii)if the company has failed, as to the causes of the failure; and

(iii)whether in his opinion further inquiry is desirable as to any matter relating to the promotion, formation, or failure of the company, or the conduct of the business thereof.

(b)The official liquidator may also, if he thinks fit, make a further report, or further reports, stating the manner in which the company was formed and whether in his opinion any fraud has been committed by any person in its promotion or formation, or by any director or other officer of the company in relation to the company since the formation thereof, and any other matter which in his opinion it is desirable to bring to the notice of the Court.

319. Custody of company’s property

(a)The official liquidator, whether appointed provisionally or not, shall take into his custody, or under his control, all the property, effects and actionable claims to which the company is or appears to be entitled.

(b)All the property and effects of the company shall be deemed to be in the custody of the Court as from the date of the order for the winding up of the company.

320. Committee of inspection in compulsory winding up

(a)The official liquidator shall within a month from the date of the order for the winding up of a company convene a meeting of the creditors of the company (as ascertained from the books and documents of the company) for the purpose of determining whether or not a committee of inspection shall be appointed to act with the liquidator, and who are to be members of the committee, if appointed.

(b)The official liquidator shall within 7 days from the date of the creditors’ meeting convene a meeting of the contributories to consider the decision of the creditors and to accept the same with or without modifications.

(c)If the contributories do not accept the decision of the creditors in its entirety, it shall be the duty of the official liquidator to apply to the Court for directions as to whether there shall be a committee of inspection and, if so, what shall be the composition of the committee, and who shall be members thereof.

(d)A committee of inspection appointed under this section shall consist of not more than twelve members being creditors and contributories of the company, or persons holding general or special powers-of-attorney from creditors or contributories, in such proportions as may be agreed on by the meetings of creditors and contributories, or as, in case of difference, may be determined by the Court.

(e)The committee of inspection shall have the right to inspect the accounts of the official liquidator at all reasonable times.

(f)The committee shall meet at such times as they may from time to time appoint, and, failing such appointment, at least once a month, and the liquidator or any member of the committee may also call a meeting of the committee as and when he thinks necessary.

(g)The committee may act by a majority of their members present at a meeting, but shall not act unless a majority of the committee is present.

(h)A member of the committee may resign by notice in writing signed by him and delivered to the liquidator.

(i)If a member of the committee becomes bankrupt, or compounds or arranges with his creditors, or is absent from five consecutive meetings of the committee without the leave of those members who together with himself represent the creditors or contributories, as the case may be, his office shall thereupon become vacant.

(j)A member of the committee may be removed by an ordinary resolution at a meeting of creditors if he represents creditors, or of contributories if he represents contributories, of which at least 7 days’ notice has been given, stating the object of the meeting.

(k)On a vacancy occurring in the committee the liquidator shall forthwith summon a meeting of creditors or of contributories, as the case may require, to fill the vacancy, and the meeting may, by resolution, re-appoint the same or appoint another creditor or contributory to fill the vacancy.

(l)The continuing members of the committee, if not less than two, may act notwithstanding any vacancy in the committee.

321. Powers of official liquidator

The official liquidator shall have power, with the sanction of the Court, to do the following things: –

(a)to institute or defend any suit or prosecution, or other legal proceeding, civil or criminal, in the name and on behalf of the company;

(b)to carry on the business of the company so far as may be necessary for the beneficial winding up of the same;

(c)to sell the immoveable and moveable property of the company by public auction or private contract, with power to transfer the whole thereof to any person or company, or to sell the same in parcels;

(d)to do all acts and to execute, in the name and on behalf of the company, all deeds, receipts, and other documents, and for that purpose to use, when necessary, the company’s seal;

(e)to prove, frank and claim in the insolvency of any contributory for any balance against his estate, and to receive dividends in the insolvency, in respect of that balance, as a separate debt due from the insolvent, and rateably with the other separate creditors;

(f)to draw, accept, make and indorse any bill of exchange, cheque or promissory note in the name and on behalf of the company, with the same effect with respect to the liability of the company as if the bill, cheque, or note had been drawn, accepted, made or indorsed by or on behalf of the company in the course of its business;

(g)to raise, on the security of the assets of the company, any money requisite;

(h)to take out, in his official name, letters of administration to any deceased contributory, and to do in his official name any other act necessary for obtaining payment of any money due from a contributory or his estate which cannot be conveniently done in the name of the company; and in all such cases the money due shall, for the purpose of enabling the liquidator to take out the letters of administration or recover the money, be deemed to be due to the liquidator himself: Provided that nothing herein empowered shall be deemed to affect the rights, duties and privileges of the Union Auditor-General;

(i)to do all such other things as may be necessary for winding up the affairs of the company and distributing its assets.

322. Discretion of official liquidator and provision for legal assistance to official liquidator

(a)The Court may provide by any order that the official liquidator may exercise any of the above powers without the sanction or intervention of the Court, and, where an official liquidator is provisionally appointed, may limit and restrict his powers by the order appointing him.

(b)The official liquidator may, with the sanction of the Court, appoint a licensed legal practitioner to assist him in the performance of his duties:

Provided that, where the official liquidator is a licensed legal practitioner, he shall not appoint his partner unless the latter consents to act without remuneration.

323.Liquidator to keep books containing proceedings of meetings and to submit account of his receipts to Court

(a)The official liquidator of a company which is being wound up by the Court shall keep, in manner prescribed, proper books in which he shall cause to be made entries or minutes of proceedings at meetings, and of such other matters as may be prescribed, and any creditor or contributory may, subject to the control of the Court, personally or by an agent inspect any such books.

(b)Every official liquidator shall, at such times as may be prescribed but not less than twice in each year during the liquidator’s tenure of office, present to the Court an account of his receipts and payments as such liquidator.

(c)The account shall be in the prescribed form, shall be made in duplicate, and shall be verified by a declaration in the prescribed manner.

(d)The Court shall cause the account to be audited in such manner as it thinks fit, and for the purpose of the audit the liquidator shall furnish the Court with such vouchers and information as the Court may require, and the Court may at any time require the production of and inspect any books or accounts kept by the liquidator.

(e)When the account has been audited, one copy thereof shall be filed and kept by the Court, and the other copy shall be delivered to the Registrar for filing, and each copy shall be open to the inspection of any creditor, or of any person interested.

324. Exercise and control of liquidator’s powers

(a)Subject to the provisions of this Law, the official liquidator of a company which is being wound up by the Court shall, in the administration of the assets of the company and in the distribution thereof among its creditors, have regard to any directions that may be given by resolution of the creditors or contributories at any general meeting or by the committee of inspection, and any directions given by the creditors or contributories at any general meeting shall in case of conflict be deemed to override any directions given by the committee of inspection.

(b)The official liquidator may summon general meetings of the creditors or contributories for the purpose of ascertaining their wishes, and it shall be the liquidator’s duty to summon meetings at such times as the creditors or contributories, by resolution, may direct, or whenever requested in writing to do so by one-tenth in value of the creditors or contributories, as the case may be.

(c)The official liquidator may apply to the Court in manner prescribed for directions in relation to any particular matter arising in the winding up.

(d)Subject to the provisions of this Law, the official liquidator shall use the liquidator’s own discretion in the administration of the assets of the company and in the distribution thereof among the creditors.

(e)If any person is aggrieved by any act or decision of the official liquidator, that person may apply to the Court, and the Court may confirm, reverse or modify the act or decision complained of, and make such order as it thinks just in the circumstances.

Ordinary Powers of Court

325. Settlement of list of contributories and application of assets

(a)As soon as may be practicable after making a winding up order, the Court shall settle a list of contributories, with power to rectify the register of members in all cases where rectification is required in pursuance of this Law, and shall cause the assets of the company to be collected and applied in discharge of its liabilities.

(b)In settling the list of contributories, the Court shall distinguish between persons who are contributories in their own right and persons who are contributories as being representatives of or liable for the debts of others.

326. Power to require delivery of property

The Court may, at any time after making a winding up order, require any contributory for the time being settled on the list of contributories and any trustee, receiver, banker, agent, or officer of the company to pay, deliver, surrender or transfer forthwith, or within such time as the Court directs, to the official liquidator any money, property or documents in his hands to which the company is prima facie entitled.

327. Power to order payment of debts by contributory

(a)The Court may, at any time after making a winding up order, make an order on any contributory for the time being settled on the list of contributories to pay, in manner directed by the order, any money due from the contributory or from the estate of the person whom the contributory represents to the company exclusive of any money payable by the contributory or the estate by virtue of any call in pursuance of this Law.

(b)The Court in making such an order may, in the case of an unlimited company, allow to the contributory by way of set-off any money due to the contributory or to the estate which the contributory represents from the company on any independent dealing or contract with the company, but not any money due to the contributory as a member of the company in respect of any dividend or profit; and may, in the case of a limited company, make to any director whose liability is unlimited or to the director’s estate the like allowance:

Provided that, in the case of any company whether limited or unlimited, when all the creditors are paid in full, any money due on any account whatever to a contributory from the company may be allowed to the contributory by way of set-off against any subsequent call.

328. Power of Court to make calls

(a)The Court may, at any time after making a winding up order, and either before or after it has ascertained the sufficiency of the assets of the company, make calls on and order payment thereof by all or any of the contributories for the time being settled on the list of the contributories to the extent of their liability, for payment of any money which the Court considers necessary to satisfy the debts and liabilities of the company, and the costs, charges and expenses of winding up, and for the adjustment of the rights of the contributories among themselves.

(b)In making the call the Court may take into consideration the probability that some of the contributories may partly or wholly fail to pay the call.

329. Power to order payment into bank

The Court may order any contributory, purchaser or other person from whom money is due to the company to pay the same into the account of the official liquidator in any scheduled bank instead of to the official liquidator, and any such order may be enforced in the same manner as if it had directed payment to the official liquidator.

330.Regulation of account with Court

All moneys, bills, cheques, notes and other securities paid and delivered into the bank where the liquidator of the company may have his account, in the event of a company being wound up by the order of the Court, shall be subject in all respects to the orders of the Court.

331. Order on contributory conclusive evidence

(a)An order made by the Court on a contributory shall (subject to any right of appeal) be conclusive evidence that the money, if any, thereby appearing to be due or ordered to be paid is due.

(b)All other pertinent matters stated in the order shall be taken to be truly stated as against all persons and in all proceedings whatsoever.

332. Power to exclude creditors not proving in time

The Court may fix a time or times within which creditors are to prove their debts or claims, or to be excluded from the benefit of any distribution made before those debts are proved.

333. Adjustment of rights of contributories

The Court shall adjust the rights of the contributories among themselves, and distribute any surplus among the persons entitled thereto.

334. Power to order costs

The Court may, in the event of the assets being insufficient to satisfy the liabilities, make an order as to the payment out of the assets of the costs, charges and expenses incurred in the winding up in such order of priority as the Court thinks just.

335. Dissolution of company

(a)When the affairs of a company have been completely wound up, the Court shall make an order that the company be dissolved from the date of the order, and the company shall be dissolved accordingly.

(b)The order shall be reported within 15 days of the making thereof by the official liquidator to the Registrar, who shall make in his books a minute of the dissolution of the company.

336.If the official liquidator makes default in complying with the requirements of section 335, he shall be liable to a fine of 400,000 kyats.

Extraordinary Powers of Court

337.Power to summon persons suspected of having property of company

(a)The Court may, after it has made a winding up order, summon before it any officer of the company or person known or suspected to have in their possession any property of the company, or supposed to be indebted to the company, or any person whom the Court

deems capable of giving information concerning the trade, dealings, affairs or property of the company.

(b)The Court may examine such person on oath concerning the same, either by word of mouth or on written interrogatories, and may reduce such person’s answers to writing and require them to sign them.

(c)The Court may require such person to produce any documents in their custody or power relating to the company; but, where the person claims any lien on documents produced by them, the production shall be without prejudice to that lien, and the Court shall have jurisdiction in the winding up to determine all questions relating to that lien.

(d)If an person so summoned, after being tendered a reasonable sum for their expenses, refuses to come before the Court at the time appointed, not having a lawful impediment (made known to the Court at the time of its sitting, and allowed by it), the Court may cause the person to be apprehended and brought before the Court for examination.

338. Power to order public examination of promoters, directors, etc,

(a)When an order has been made for winding up a company by the Court, and the official liquidator has applied to the Court stating that in the liquidator’s opinion a fraud has been committed by any person in the promotion or formation of the company or by any director or other officer of the company, in relation to the company since its formation, the Court may, after consideration of the application, direct that any person who has taken any part in the promotion or formation of the company, or has been a director or other officer of the company, shall attend before the Court on a day appointed by the Court for that purpose, and be publicly examined as to the promotion or formation or the conduct of the business of the company, or as to the person’s conduct and dealings as director or other officer thereof.

(b)The official liquidator shall take part in the examination, and for that purpose may, if specially authorized by the Court in that behalf, employ such legal assistance as may be sanctioned by the Court.

(c)Any creditor or contributory may also take part in the examination either personally or by any person entitled to appear before the Court.

(d)The Court may put such questions to the person examined as the Court thinks fit.

(e)The person examined shall be examined on oath, and shall answer all such questions as the Court may put or allow to be put to them.

(f)A person ordered to be examined under this section may at their own cost employ any person entitled to appear before the Court, who shall be at liberty to put to the person being examined such questions as the Court may deem just for the purpose of enabling the person to explain or qualify any answers given by the person: Provided that if the person is, in the opinion of the Court, exculpated from any charges made or suggested against them, the Court may allow the person such costs as in its discretion it may think fit.

(g)Notes of the examination shall be taken down in writing, and shall be read over to or by, and signed by, the person examined, and may thereafter be used in evidence against the

person in civil proceedings, and shall be open to the inspection of any creditor or contributory at all reasonable times.

(h)The Court may, if it thinks fit, adjourn the examination from time to time.

(i)An examination under this section may, if the Court so directs, and subject to any rules in this behalf, be held before any Judge or officer of the Court, being an official referee, master, registrar or deputy registrar, and the powers of the Court under this section as to the conduct of the examination, but not as to costs, may be exercised by the person before whom the examination is held.

339. Power to arrest absconding contributory

The Court, at any time either before or after making a winding up order, on proof of probable cause for believing that a contributory is about to quit the Union or otherwise to abscond, or to remove or conceal any of their property for the purpose of evading payment of calls or of avoiding examination respecting the affairs of the company, may cause the contributory to be arrested and their books and papers and moveable property to be seized, and the contributory and them to be safely kept until such time as the Court may order.

340.Saving of other proceedings

Any powers by this Law conferred on the Court shall be in addition to, and not in restriction of, any existing powers of instituting proceedings against any contributory or debtor of the company, or the estate of any contributory or debtor, for the recovery of any call or other sums.

Enforcement of and Appeal from Order

341. Power to enforce orders

All orders made by a Court under this Law may be enforced in the manner in which decrees of such Court made in any suit pending therein may be enforced.

342. Order made in any Court to be enforced by other Courts

(a)Any order made by a Court for or in the course of the winding up of a company shall be enforced in any place in the Union, other than that in which such Court is situate, by the Court that would have had jurisdiction in respect of such company if the registered office of the company had been situate at such other place, and in the same manner in all respects as if such order had been made by the Court that is hereby required to enforce the same.

(b)For the purposes of jurisdiction to wind up companies, registered office means the place which has longest been the registered office of the company during the six months immediately preceding the presentation of the petition for winding up.

343.Mode of dealing with orders to be enforced by other Courts

Where any order made by one Court is to be enforced by another Court, a certified copy of the order so made shall be produced to the proper officer of the Court required to enforce the same, and the production of such certified copy shall be sufficient evidence of such order having been made; and thereupon the last-mentioned Court shall take the requisite steps in the matter for enforcing the order, in the same manner as if it were the order of the Court enforcing the same.

344. Appeals from orders

Re-hearings of and appeals from any order or decision made or given in the matter of the winding up of a company by the Court may be had in the same manner and subject to the same conditions in and subject to which appeals may be had from any order or decision of the same Court in cases within its ordinary jurisdiction.

Voluntary Winding up

345. Circumstances in which company may be wound up voluntarily

A company may be wound up voluntarily:

(a)when the period (if any) fixed for the duration of the company by the constitution of the company expires, or the event (if any) occurs on the occurrence of which the constitution provides that the company is to be dissolved, and the company in general meeting has passed a resolution requiring the company to be wound up voluntarily;

(b)if the company resolves by special resolution that the company be wound up voluntarily; or

(c)if the company resolves by special resolution to the effect that it cannot by reason of its liabilities continue its business, and that it is advisable to wind up;

and the expression “resolution for voluntarily winding up” when used hereafter in this Part means a resolution passed under sub-section (a), sub-section (b) or sub-section (c) of this section.

346.Commencement of voluntary winding up

A voluntary winding up shall be deemed to commence at the time of the passing of the resolution for voluntarily winding up.

347. Effect of voluntary winding up on status of company

When a company is wound up voluntarily, the company shall, from the commencement of the winding up, cease to carry on its business, except so far as may be required for the beneficial winding up thereof:

Provided that the corporate state and corporate powers of the company shall, notwithstanding anything to the contrary in its constitution, continue until it is dissolved.

348. Notice of resolution to wind up voluntarily

Notice of any special resolution for winding up a company voluntarily shall be given by the company within 10 days of the passing of the same by advertisement in the Gazette and also in a daily newspaper circulating generally in the Union.

349. If a company makes default in complying with the requirements of section 348, it shall be liable to a fine of 250,000 kyats; and every director or other officer of the company who knowingly and wilfully authorizes or permits the default shall be liable to the same penalty.

350. Declaration of solvency

(a)Where it is proposed to wind up a company voluntarily, the directors of the company or, in the case of a company having more than two directors, the majority of the directors may, or in the case of a company with only one director, that sole director, at a meeting of the directors held before the date on which the notices of the meeting at which the

resolution for the winding up of the company is to be proposed are sent out, make a declaration verified by an affidavit to the effect that they have made a full inquiry into the affairs of the company, and that, having so done, they have formed the opinion that the company will be able to pay its debts in full within a period, not exceeding three years, from the commencement of the winding up.

(b)Such declaration shall be supported by a report of the company’s auditors on the company’s affairs, and shall have no effect for the purposes of this Law unless it is delivered to the Registrar for registration before the date mentioned in sub-section (a).

(c)A winding up in the case of which a declaration has been made and delivered in accordance with this section is in this Law referred to as a “members’ voluntary winding up”, and a winding up in the case of which a declaration has not been made and delivered as aforesaid is in this Law referred to as a “creditors’ voluntary winding up”.

Members’ Voluntary Winding up

351.Provisions applicable to a members’ voluntary winding up

The provisions contained in sections 352 to 357 (inclusive), shall apply in relation to a members’ voluntary winding up.

352. Power of company to appoint and fix remuneration of liquidators

(a)The company in general meeting shall appoint one or more liquidators for the purpose of winding up the affairs and distributing the assets of the company, and may fix the remuneration to be paid to him or them.

(b)On the appointment of a liquidator all the powers of the directors shall cease, except so far as the company in general meeting, or the liquidator, sanctions the continuance thereof.

353. Power to fill vacancy in office of liquidator

(a)If a vacancy occurs by death, resignation or otherwise in the office of liquidator appointed by the company, the company in general meeting may, subject to any arrangement with its creditors, fill the vacancy.

(b)For that purpose a general meeting may be convened by any contributory or, if there were more liquidators than one, by the continuing liquidators.

(c)The meeting shall be held in manner provided by this Law or by the constitution, or in such manner as may, on application by any contributory or by the continuing liquidators, be determined by the Court.

354. Power of liquidator to accept shares, etc., as consideration for sale of property of company

(a)Where a company is proposed to be, or is in course of being, wound up altogether voluntarily, and the whole or part of its business or property is proposed to be transferred or sold to another company, whether a company within the meaning of this Law or not (in this section called “the transferee company”), the liquidator of the first-mentioned company (in this section called “the transferor company”) may, with the sanction of a special resolution of that company conferring either a general authority on the liquidator or an authority in respect of any particular arrangement, receive, in compensation or part

compensation for the transfer or sale, shares, policies, or other like interests in the transferee company, for distribution among the members of the transferor company, or may enter into any other arrangement whereby the members of the transferor company may, in lieu of receiving cash, shares, policies, or other like interests or in addition thereto, participate in the profits of or receive any other benefit from the transferee company.

(b)Any sale or arrangement in pursuance of this section shall be binding on the members of the transferor company.

(c)If any member of the transferor company who did not vote in favour of the special resolution expresses his dissent therefrom in writing addressed to the liquidator and left at the registered office of the company within 7 days after the passing of the special resolution, he may require the liquidator either to abstain from carrying the resolution into effect or to purchase his interest at a price to be determined by agreement or by arbitration in manner hereafter provided.

(d)If the liquidator elects to purchase the member’s interest, the purchase money must be paid before the company is dissolved, and be raised by the liquidator in such manner as may be determined by special resolution.

(e)A special resolution shall not be invalid for the purposes of this section by reason that it is passed before or concurrently with a resolution for voluntary winding up or for appointing liquidators, but if an order is made within a year for winding up the company by or subject to the supervision of the Court, the special resolution shall not be valid unless sanctioned by the Court.

(f)The provisions of the Arbitration Law, other than those restricting the application of the Arbitration Law in respect of the subject-matter of the arbitration, shall apply to all arbitrations in pursuance of this section.

355. Duty of liquidator to call general meeting at end of each year

In the event of the winding up continuing for more than one year, the liquidator shall summon a general meeting of the company at the end of the first year from the commencement of the winding up and of each succeeding year, or as soon thereafter as may be convenient within 90 days of the close of the year, and shall lay before the meeting an account of his acts and dealings and of the conduct of the winding up during the preceding year and a statement in the prescribed form with respect to the position of the liquidation.

356.If the liquidator fails to comply with section 355, he shall be liable to a fine of 500,000 kyats.

357. Final meeting and dissolution

(a)As soon as the affairs of the company are fully wound up, the liquidator shall make up an account of the winding up, showing how the winding up has been conducted and the property of the company has been disposed of, and thereupon shall call a general meeting of the company for the purpose of laying before it the account and giving any explanation thereof.

(b)The meeting shall be called by advertisement specifying the time, place and object thereof, and published 28 days at least before the meeting in the manner specified in section 348 for publication of a notice under that section.

(c)Within 7 days after the meeting, the liquidator shall send to the Registrar a copy of the account, and shall make a return to him of the holding of the meeting and of its date:

Provided that, if a quorum is not present at the meeting, the liquidator shall, in lieu of the said return, make a return that the meeting was duly summoned and that no quorum was present thereat, and upon such a return being made the provisions of this sub-section as to the making of the return shall be deemed to have been complied with.

(d)The Registrar on receiving the account and either of the returns mentioned in sub-section (c) shall forthwith register them, and on the expiration of three months from the registration of the return the company shall be deemed to be dissolved:

Provided that the Court may, on the application of the liquidator or of any other person who appears to the Court to be interested, make an order deferring the date at which the dissolution of the company is to take effect for such time as the Court thinks fit.

358.If a copy of the account is not sent or a return is not made in accordance with sub-section 357(c) the liquidator shall be liable to a fine of 150,000 kyats.

359.It shall be the duty of the person on whose application an order of the Court under sub-section 357(d) is made, within 21 days after the making of the order, to deliver to the Registrar a certified copy of the order for registration, and if that person fails so to do he shall be liable to a fine of 150,000 kyats.

Creditors’ Voluntary Winding up

360.Provisions applicable to a creditors’ voluntary winding up

The provisions contained in sections 361 to 372 (inclusive) shall apply in relation to a creditors’ voluntary winding up.

361. Meeting of creditors

(a)The company shall cause a meeting of the creditors of the company to be summoned for the day, or the day next following the day, on which there is to be held the meeting at which the resolution for voluntary winding up is to be proposed, and shall cause the notices of the said meeting of creditors to be sent to the creditors simultaneously with the sending of the notices of the said meeting of the company.

(b)The company shall cause notice of the meeting of the creditors to be advertised in the manner specified in section 348 for the publication of a notice under that section.

(c)The directors of the company shall:

(i)cause a full statement of the position of the company’s affairs together with a list of the creditors of the company and the estimated amount of their claims to be laid before the meeting of creditors to be held as aforesaid; and

(ii)appoint one of their number to preside at the said meeting.

(d)It shall be the duty of the director appointed to preside at the meeting of creditors to attend the meeting and preside thereat.

(e)If the meeting of the company at which the resolution for voluntary winding up is to be proposed is adjourned and the resolution is passed at an adjourned meeting, any

resolution passed at the meeting of the creditors, held in pursuance of sub-section (a), shall have effect as if it had been passed immediately after the passing of the resolution for winding up the company.

362. If default is made:

(a)by the company in complying with sub-sections 361(a) and 361(b);

(b)by the directors of the company in complying with sub-section 361(c); or

(c)by any director of the company in complying with sub-section 361(d);

the company, directors or director, as the case may be, shall be liable to a fine of 250,000 kyats, and, in the case of default by the company, every officer of the company who is in default shall be liable to the same penalty.

363.Appointment of liquidator

The creditors and the company at their respective meetings mentioned in section 361 may nominate a person to be liquidator for the purpose of winding up the affairs and distributing the assets of the company, and if the creditors and the company nominate different persons, the person nominated by the creditors shall be liquidator, and if no person is nominated by the creditors the person, if any, nominated by the company shall be liquidator:

Provided that, in the case of different persons being nominated, any director, member or creditor of the company may, within 7 days after the date on which the nomination was made by the creditors, apply to the Court for an order either directing that the person nominated as liquidator by the company shall be liquidator instead of or jointly with the person nominated by the creditors, or appointing some other person to be liquidator instead of the person appointed by the creditors.

364. Appointment of committee of inspection

(a)The creditors at the meeting to be held in pursuance of section 361 or at any subsequent meeting may, if they think fit, appoint a committee of inspection consisting of not more than five persons, and if such a committee is appointed the company may, either at the meeting at which the resolution for voluntary winding up is passed or at any time subsequently in general meeting, appoint such number of persons as they think fit to act as members of the committee not exceeding five in number:

Provided that the creditors may, if they think fit, resolve that all or any of the persons so appointed by the company ought not to be members of the committee of inspection, and, if the creditors so resolve, the persons mentioned in the resolution shall not, unless the Court otherwise directs, be qualified to act as members of the committee, and on any application to the Court under this provision the Court may, if it thinks fit, appoint other persons to act as such members in place of the persons mentioned in the resolution.

365.Fixing of liquidators’ remuneration and cessation of directors’ powers

(a)The committee of inspection, or if there is no such committee, the creditors, may fix the remuneration to be paid to the liquidator or liquidators, and where the remuneration is not so fixed, it shall be determined by the Court.

(b)On the appointment of a liquidator, all the powers of the directors shall cease, except so far as the committee of inspection, or if there is no such committee, the creditors, sanction the continuance thereof.

366. Power to fill vacancy in office of liquidator

If a vacancy occurs by death, resignation or otherwise in the office of a liquidator, other than a liquidator appointed by or by the direction of the Court, the creditors may fill the vacancy.

367. Application of section 354 to a creditors’ voluntary winding up

The provisions of section 354 shall apply in the case of a creditors’ voluntary winding up as in the case of a members’ voluntary winding up, with the modification that the powers of the liquidator under the said section shall not be exercised except with the sanction either of the Court or of the committee of inspection.

368.Duty of liquidator to call meetings of company and of creditors at end of each year

In the event of the winding up continuing for more than one year, the liquidator shall summon a general meeting of the company and a meeting of creditors at the end of the first year from the commencement of the winding up, and of each succeeding year, or as soon thereafter as may be convenient, and shall lay before the meetings an account of his acts and dealings and of the conduct of the winding up during the preceding year and a statement in the prescribed form with respect to the position of the winding up.

369. If the liquidator fails to comply with section 368, he shall be liable to a fine of 500,000 kyats.

370. Final meeting and dissolution

(a)As soon as the affairs of the company are fully wound up, the liquidator shall make up an account of the winding up, showing how the winding up has been conducted and the property of the company has been disposed of, and thereupon shall call a general meeting of the company and a meeting of the creditors for the purpose of laying the account before the meetings and giving any explanation thereof.

(b)Each such meeting shall be called by advertisement specifying the time, place and object thereof, and published 28 days at least before the meeting in the manner specified in section 348 for the publication of a notice under that section.

(c)Within 7 days after the date of the meetings, or, if the meetings are not held on the same date, after the date of the later meeting, the liquidator shall send to the Registrar a copy of the account, and shall make a return to him of the holding of the meetings and of their dates, provided that, if a quorum (which for the purposes of this section shall be two persons) is not present at either such meeting, the liquidator shall, in lieu of such return, make a return that the meeting was duly summoned and that no quorum was present thereat, and upon such a return being made the provisions of this sub-section as to the making of the return shall, in respect of that meeting, be deemed to have been complied with.

(d)The Registrar on receiving the account and in respect of each such meeting either of the returns mentioned in sub-section (c) shall forthwith register them, and on the expiration of three months from the registration thereof the company shall be deemed to be dissolved, provided that, the Court may, on the application of the liquidator or of any other person who appears to the Court to be interested, make an order deferring the date

at which the dissolution of the company is to take effect for such time as the Court thinks fit.

371.If a copy of the account is not sent or the return is not made in accordance with sub-section 370(c) the liquidator shall be liable to a fine of 150,000 kyats.

372.It shall be the duty of the person on whose application an order of the Court under sub-section 370(d) is made, within 10 days after the making of the order, to deliver to the Registrar a certified copy of the order for registration, and if that person fails to do so he shall be liable to a fine of 150,000 kyats.

Members’ or Creditors’ Voluntary Winding up

373.Provisions applicable to every voluntary winding up

The provisions contained in sections 374 to 382 (inclusive) shall apply to every voluntary winding up, whether a members’ or a creditors’ winding up.

374. Distribution of property of company

Subject to the provisions of this Law as to preferential payments, the property of a company shall, on its winding up, be applied in satisfaction of its liabilities pari passu and, subject to such application, shall, unless the constitution otherwise provide, be distributed among the members according to their rights and interests in the company.

375. Powers and duties of liquidator in voluntary winding up

(a)The liquidator may –

(i)in the case of a members’ voluntary winding up, with the sanction of a special resolution of the company, and in the case of a creditors’ voluntary winding up, with the sanction of either the Court or the committee of inspection, exercise any of the powers given by sub-sections (d), (e), (f) and (h) of section 321 to a liquidator in a winding up. The exercise by the liquidator of the powers given by this sub-section shall be subject to the control of the Court and any creditor or contributory may apply to the Court with respect to any exercise or proposed exercise of any of these powers;

(ii)without the sanction referred to in sub-section (a)(i), exercise any of the other powers by this Law given to the liquidator in a winding up by the Court;

(iii)exercise the power of the Court under this Law of settling a list of contributories, and the list of contributories shall be prima facie evidence of the liability of the persons named therein to be contributories;

(iv)exercise the power of the Court of making calls; and

(v)summon general meetings of the company for the purpose of obtaining the sanction of the company by special resolution or for any other purpose he may think fit.

(b)The liquidator shall pay the debts of the company and shall adjust the rights of the contributories among themselves.

(c)When several liquidators are appointed, any power given by this Law may be exercised by such one or more of them as may be determined at the time of their appointment, or, in default of such determination, by any number not less than two.

376.Power of Court to appoint and remove liquidator in voluntary winding up and notice by liquidator of his appointment

(a)If from any cause whatever there is no liquidator acting, the Court may appoint a liquidator.

(b)The Court may, on cause shown, remove a liquidator and appoint another liquidator.

(c)The liquidator shall, within 21 days after their appointment, deliver to the Registrar for registration a notice of appointment in the prescribed form.

377.If the liquidator fails to comply with the requirements of section 376, they shall be liable to a fine of 150,000 kyats.

378.Arrangement when binding on creditors

(a)Any arrangement entered into between a company about to be, or in the course of being, wound up and its creditors shall, subject to the right of appeal under this section, be binding on the company if sanctioned by a special resolution, and on the creditors if acceded to by three-fourths in number and value of the creditors.

(b)Any creditor or contributory may, within 21 days from the completion of the arrangement, appeal to the Court against it, and the Court may thereupon, as it thinks just, amend, vary or confirm the arrangement.

379. Power to apply to Court to have questions determined or powers exercised

(a)The liquidator or any contributory or creditor may apply to the Court to determine any question arising in the winding up of a company, or to exercise, as respects the enforcing of calls, staying of proceedings or any other matter, all or any of the powers which the Court might exercise if the company were being wound up by the Court.

(b)The liquidator or any creditor or contributory may apply for an order setting aside any attachment, distress or execution put into force against the estate or effects of the company after the commencement of the winding up.

(c)Such application shall be made to the Court having jurisdiction to wind up the company.

(d)The Court, if satisfied that the determination of the question or the required exercise of power or the order applied for will be just and beneficial, may accede wholly or partially to the application on such terms and conditions as it thinks fit, or may make such other order on the application as it thinks just.

380. Cost of voluntary winding up

All costs, charges and expenses properly incurred in the winding up, including the remuneration of the liquidator, shall, subject to the rights of secured creditors, if any, be payable out of the assets of the company in priority to all other claims.

381. Saving for rights of creditors and contributories

The winding up of a company shall not bar the right of any creditor or contributory to have it wound up by the Court, but in the case of an application by a contributory the Court must be satisfied that the rights of the contributories will be prejudiced by a voluntary winding up.

382. Power of Court to adopt proceedings of voluntary winding up

Where a company is being wound up voluntarily, and an order is made for winding up by the Court, the Court may, if it thinks fit, by the same or any subsequent order, provide for the adoption of all or any of the proceedings in the voluntary winding up.

Winding up subject to Supervision of Court

383. Power to order winding up subject to supervision

When a company has by special resolution resolved to wind up voluntarily, the Court may make an order that the voluntary winding up shall continue, but subject to such supervision of the Court, and with such liberty for creditors, contributories or others to apply to the Court, and generally on such terms and conditions as the Court thinks just.

384. Effect of petition for winding up subject to supervision

A petition for the continuance of a voluntary winding up subject to the supervision of the Court shall, for the purpose of giving jurisdiction to the Court over suits, be deemed to be a petition for winding up by the Court.

385. Court may have regard to wishes of creditors and contributories

The Court may, in deciding between a winding up by the Court and a winding up subject to supervision, in the appointment of liquidators, and in all other matters relating to the winding up subject to supervision, have regard to the wishes of the creditors or contributories as proved to it by any sufficient evidence.

386. Power for Court to appoint or remove liquidators

(a)Where an order is made for a winding up subject to supervision, the Court may by the same or any subsequent order appoint any additional liquidator.

(b)A liquidator appointed by the Court under this section shall have the same powers, be subject to the same obligations, and in all respects stand in the same position as if he had been appointed by the company.

(c)The Court may remove any liquidator so appointed by the Court or any liquidator continued under the supervision order, and fill any vacancy occasioned by the removal or by death or resignation.

387. Effect of supervision order

(a)Where an order is made for a winding up subject to supervision, the liquidator may, subject to any restrictions imposed by the Court, exercise all his powers without the sanction or intervention of the Court, in the same manner as if the company were being wound up altogether voluntarily.

(b)Except as provided in sub-section (a), and save for the purposes of section 338, any order made by the Court for a winding up subject to the supervision of the Court shall for all

purposes, including the staying of suit and other proceedings, be deemed to be an order of the Court for winding up the company by the Court, and shall confer full authority on the Court to make calls, or to enforce calls made by the liquidators, and to exercise all other powers which it might have exercised if an order had been made for winding up the company altogether by the Court.

(c)In the construction of the provisions whereby the Court is empowered to direct any act or thing to be done to or in favour of the official liquidator, the expression “official liquidator” shall be deemed to mean the liquidator conducting the winding up subject to the supervision of the Court.

388.Appointment in certain cases of voluntary liquidators to office of official liquidator

Where an order has been made for the winding up of a company subject to supervision, and an order is afterwards made for winding up by the Court, the Court may, by the last-mentioned order or by any subsequent order, appoint the voluntary liquidators or any of them, either provisionally or permanently, and either with or without the addition of any other person, to be official liquidator in the winding up by the Court.

Supplemental Provisions

389.Avoidance of transfers, etc., after commencement of winding up and debts of all descriptions to be proved

(a)In the case of voluntary winding up every transfer of shares, except transfers made to or with the sanction of the liquidator, and every alteration in the status of the members of the company, made after the commencement of the winding up, shall be void.

(b)In the case of a winding up by or subject to the supervision of the Court, every disposition of the property (including actionable claims) of the company, and every transfer of shares, or alteration in the status of its members, made after the commencement of the winding up, shall, unless the Court otherwise orders, be void.

(c)In every winding up (subject in the case of insolvent companies to the application in accordance with the provisions of this Law of the law of insolvency) all debts payable on a contingency, and all claims against the company, present or future, certain or contingent, shall be admissible to proof against the company, a just estimate being made, so far as possible, of the value of such debts or claims as may be subject to any contingency or for some other reason do not bear a certain value.

390. Application of insolvency rules in winding up of insolvent companies

In the winding up of an insolvent company the same rules shall apply and be observed with regard to the respective rights of secured and unsecured creditors and to debts provable and to the valuation of annuities and future and contingent liabilities as are in force for the time being under the law of insolvency with respect to the estates of persons adjudged insolvent; and all persons who in any such case would be entitled to prove for and receive dividends out of the assets of the company may come in under the winding up, and make such claims against the company as they respectively are entitled to by virtue of this section.

391. Preferential payments

(a)In a winding up there shall be paid in priority to all other debts:

(i)all revenue, taxes, cesses and rates, whether payable to the Government or to a local authority, due from the company at the date hereinafter mentioned in sub-section 391(e) and having become due and payable within the twelve months next before that date;

(ii)all wages or salary of any clerk or servant in respect of service rendered to the company within the two months next before the said date;

(iii)all wages of any labourer or workman whether payable for time or piecework, in respect of services rendered to the company within the two months next before the said date;

(iv)compensation payable under the Workmen’s Compensation Act or other applicable law in respect of the death or disablement of any officer or employee of the company;

(v)all sums due to any employee from a provident fund, a pension fund, a gratuity fund or any other fund for the welfare of the employees maintained by the company; and

(vi)the expenses of any investigation held in pursuance of sub-section 271(a)(iii) of this Law.

(b)The foregoing debts shall:

(i)rank equally among themselves and be paid in full, unless the assets are insufficient to meet them, in which case they shall abate in equal proportion; and

(ii)so far as the assets of the company available for payment of general creditors are insufficient to meet them, have priority over the claims of holders of debentures under any floating charge created by the company, and be paid accordingly out of any property comprised in or subject to that charge.

(c)Subject to the retention of such sums as may be necessary for the costs and expenses of the winding up, the foregoing debts shall be discharged forthwith so far as the assets are sufficient to meet them.

(d)In the event of a landlord or other person distraining or having distrained on any goods or effects of the company within three months next before the date of a winding up order, the debts to which priority is given by this section shall be a first charge on the goods or effects so distrained on, or the proceeds of the sale thereof, provided that in respect of any money paid under any such charge the landlord or other person shall have the same rights of priority as the person to whom the payment is made.

(e)The date hereinbefore in this section referred to is:

(i)in the case of a company ordered to be wound up compulsorily which had not previously commenced to be wound up voluntarily, the date of the winding up order; and

(ii)in any other case, the date of the commencement of the winding up.

392. Disclaimer of property

(a)Where any part of the property of a company which is being wound up consists of land of any tenure burdened with onerous covenants, of shares or stock in companies, of unprofitable contracts, or of any other property that is unsaleable, or not readily saleable, by reason of its binding the possessor thereof to the performance of any onerous act, or to the payment of any sum of money, the liquidator of the company, notwithstanding that he had endeavoured to sell or has taken possession of the property, or exercised any act of ownership in relation thereto, may, with the leave of the Court and subject to the provisions of this section, by writing signed by him, at any time within twelve months after the commencement of the winding up or such extended period as may be allowed by the Court, disclaim the property:

(b)Provided that, where any such property has not come to the knowledge of the liquidator within 28 days after the commencement of the winding up, the power under this section of disclaiming the property may be exercised at any time within twelve months after he has become aware thereof or such extended period as may be allowed by the Court.

(c)The disclaimer shall operate to determine, as from the date of disclaimer, the rights, interests, and liabilities of the company, and the property of the company, in or in respect of the property disclaimed, but shall not, except so far as is necessary for the purpose of releasing the company and the property of the company from liability, affect the rights or liabilities of any other person.

(d)The Court, before or on granting leave to disclaim, may require such notices to be given to persons interested, and impose such terms as a condition of granting leave, and make such other order in the matter as the Court thinks just.

(e)The liquidator shall not be entitled to disclaim any property under this section in any case where an application in writing has been made to him by any persons interested in the property requiring him to decide whether he will or will not disclaim, and the liquidator has not, within a period of 28 days after the receipt of the application or such further period as may be allowed by the Court, given notice to the applicant that he intends to apply to the Court for leave to disclaim, and in the case of a contract, if the liquidator, after such an application as aforesaid, does not within the said period or further period disclaim the contract, the company shall be deemed to have adopted it.

(f)The Court may, on the application of any person who is, as against the liquidator, entitled to the benefit or subject to the burden of a contract made with the company, make an order rescinding the contract on such terms as to payment by or to either party of damages for the nonperformance of the contract, or otherwise as the Court thinks just, and any damages payable under the order to any such person may be proved by him as a debt in the winding up.

(g)The Court may, on an application by any person who either claims any interest in any disclaimed property or is under any liability not discharged by this Law in respect of any disclaimed property, and on hearing any such persons as it thinks fit, make an order for the vesting of the property in or the delivery of the property to any persons entitled thereto, or to whom it may seem just that the property should be delivered by way of compensation for such liability as aforesaid, or a trustee for him, and on such terms as the Court thinks just, and on any such vesting order being made the property comprised

therein shall vest accordingly in the person therein named in that behalf without any conveyance or assignment for the purpose.

(h)Provided that, where the property disclaimed is of a leasehold nature, the Court shall not make a vesting order in favour of any person claiming under the company whether as under-lessee or as mortgagee except upon the terms of making that person:

(i)subject to the same liabilities and obligations as those to which the company was subject under the lease in respect of the property at the commencement of the winding up; or

(ii)if the Court thinks fit, subject only to the same liabilities and obligations as if the lease had been assigned to that person at that date; and in either event (if the case so requires) as if the lease had comprised only the property comprised in the vesting order, and any mortgagee or under-lessee declining to accept a vesting order upon such terms shall be excluded from all interest in and security upon the property, and, if there is no person claiming under the company who is willing to accept an order upon such terms, the Court shall have power to vest the estate and interest of the company in the property in any person liable, either personally or in a representative character, and either alone or jointly with the company, to perform the lessee’s covenants in the lease, freed and discharged from all estates, encumbrances and interests created therein by the company.

(i)Any person injured by the operation of a disclaimer under this section shall be deemed to be a creditor of the company to the amount of the injury, and may accordingly prove the amount as a debt in the winding up.

393. Fraudulent preference

(a)Any transfer, delivery of goods, payment, execution or other act relating to property which would, if made or done by or against an individual, be deemed in his insolvency a fraudulent preference, shall, if made or done by or against a company, be deemed, in the event of its being wound up, a fraudulent preference of its creditors, and be invalid accordingly.

(b)For the purposes of this section the presentation of a petition for winding up in the case of a winding up by or subject to the supervision of the Court, and a resolution for winding up in the case of a voluntary winding up, shall be deemed to correspond with the act of insolvency in the case of an individual.

(c)Any transfer or assignment by a company of all its property to trustees for the benefit of all its creditors shall be void.

394. Avoidance of certain attachments, executions, etc.

(a)Where any company is being wound up by or subject to the supervision of the Court, any attachment, distress or execution put in force without leave of the Court against the estate or effects, or any sale held without leave of the Court of any of the properties, of the company after the commencement of the winding up shall be void.

(b)Nothing in this section applies to proceedings by the Government.

395. Effect of floating charge

Where a company is being wound up, a floating charge on the undertaking or property of the company created within three months of the commencement of the winding up shall, unless it is proved that the company immediately after the creation of the charge was solvent, be invalid except to the amount of any cash paid to the company at the time of, or subsequently to the creation of, and in consideration for, the charge, together with interest on that amount at the rate of five per cent per annum.

396. General scheme of liquidation may be sanctioned

(a)The liquidator may, with the sanction of the Court when the company is being wound up by the Court or subject to the supervision of the Court, and with the sanction of a special resolution of the company in the case of a voluntary winding up, do the following things or any of them:

(i) pay any classes of creditors in full;

(ii)make any compromise or arrangement with creditors or persons claiming to be creditors or having or alleging themselves to have any claim, present or future, whereby the company may be rendered liable;

(iii)compromise all calls and liabilities to calls, debts and liabilities capable of resulting in debts, and all claims, present or future, certain or contingent, subsisting or supposed to subsist, between the company and a contributory, or alleged contributory or other debtor or person apprehending liability to the company, and all questions in any way relating to or affecting the assets or the winding up of the company, on such terms as may be agreed, and take any security for the discharge of any such call, debt, liability or claim, and give a complete discharge in respect thereof.

(b)The exercise by the liquidator of the powers of this section shall be subject to the control of the Court, and any creditor or contributory may apply to the Court with respect to any exercise or proposed exercise of any of these powers.

397.Power of Court to assess damages against delinquent directors, etc.

(a)Where, in the course of winding up a company, it appears that any person who has taken part in the formation or promotion of the company, or any past or present director or liquidator, or any officer of the company has misapplied or retained or become liable or accountable for any money or property of the company, or been guilty of any misfeasance or breach of trust in relation to the company, the Court may, on the application of the liquidator or of any creditor or contributory, made within three years from the date of the first appointment of a liquidator in the winding up, or of the misapplication, retainer, misfeasance or breach of trust, as the case may be, whichever is longer, examine into the conduct of the promoter, director, liquidator or officer, and compel such person to repay or restore the money or property or any part thereof respectively with interest at such rate as the Court thinks just, or to contribute such sum to the assets of the company by way of compensation in respect of the misapplication, retainer, misfeasance or breach of trust as the Court thinks just.

(b)This section shall apply notwithstanding that the offence is one for which the offender may be criminally responsible.

398. Penalty for falsification of books

If any director officer or contributory of any company being wound up destroys, mutilates, alters or falsities or fraudulently secretes any books, papers or securities, or makes, or is privy to the making of, any false or fraudulent entry in any register, book of account or document belonging to the company with intent to defraud or deceive any person, such director officer or contributory shall be liable to imprisonment for a term which may extend to seven years, and shall also be liable to fine.

399. Prosecution of delinquent directors

(a)If it appears to the Court in the course of a winding up by, or subject to the supervision of, the Court that any past or present director or other officer, or any member, of the company has been guilty of any offence in relation to the company for which he is criminally liable, the Court may, either on the application of any person interested in the winding up or of its own motion, direct the liquidator either himself to prosecute the offender or to refer the matter to the Registrar.

(b)If it appears to the liquidator in the course of a voluntary winding up that any past or present director or other officer, or any member, of the company has been guilty of any offence in relation to the company for which the director, officer or member is criminally liable, the liquidator shall forthwith report the matter to the Registrar and shall furnish to the Registrar such information and give to the Registrar such access to and facilities for inspecting and taking copies of any documents, being information or documents in the possession or under the control of the liquidator relating to the matter in question, as the Registrar may require.

(c)Where any report is made under sub-section (b) to the Registrar, the Registrar may, if the Registrar thinks fit, refer the matter to the Union Minister for further inquiry, and the Union Minister shall thereupon investigate the matter and may, if the Union Minister thinks it expedient, apply to the Court for an order conferring on any person designated by the Union Minister for the purpose with respect to the company concerned all such powers of investigating the affairs of the company as are provided by this Law in the case of a winding up by the Court.

(d)If on any report to the Registrar under sub-section (b) it appears to the Registrar that the case is not one in which proceedings ought to be taken by the Registrar, the Registrar shall inform the liquidator accordingly, and thereupon, subject to the previous sanction of the Court, the liquidator may take proceedings against the offender.

(e)If it appears to the Court in the course of a voluntary winding up that any past or present director or other officer, or any member, of the company has been guilty as aforesaid, and that no report with respect to the matter has been made by the liquidator to the Registrar, the Court may, on the application of any person interested in the winding up or of its own motion, direct the liquidator to make such a report, and on a report being made accordingly the provisions of this section shall have effect as though the report has been made in pursuance of the provisions of sub-section (b).

(f)If, where any matter is reported or referred to the Registrar under this section, the Registrar must give the accused person an opportunity of making a statement in writing to him and if the Registrar considers that the case is one in which a prosecution ought to be instituted, the Registrar shall seek the advice of the Union Attorney-General’s Office and

if the Registrar institutes proceedings following such advice, and it shall be the duty of the liquidator and of every officer and agent of the company past and present (other than the defendant in the proceedings) to give all assistance in connection with the prosecution which the person is reasonably able to give:

For the purposes of this sub-section, the expression “agent” in relation to a company shall be deemed to include any banker or legal adviser of the company and any person employed by the company as auditor, whether that person is or is not an officer of the company.

(g)If any person fails or neglects to give assistance in manner required by sub-section (f), the Court may, on the application of the Registrar, direct that person to comply with the requirements of the said sub-section, and where any such application is made with respect to a liquidator, the Court may, unless it appears that the failure or neglect to comply was due to the liquidator not having in the liquidator’s hands sufficient assets of the company to enable the liquidator so to do, direct that the costs of the application shall be borne by the liquidator personally.

400. Penalty for false evidence

If any person, upon any examination upon oath authorized under this Law, or in any affidavit, deposition or solemn affirmation, in or about the winding up of any company under this Law, or otherwise in or about any matter arising under this Law, intentionally gives false evidence, such person shall be liable to imprisonment for a term which may extend to seven years, and also be liable to fine.

401. Penal provisions

(a)If any person, being a past or present director or other officer of a company which at the time of the commission of the alleged offence is being wound up, whether by or under the supervision of the Court or voluntarily, or is subsequently ordered to be wound up by the Court or subsequently passes a resolution for voluntary winding up:

(i)does not to the best of their knowledge and belief fully and truly discover to the liquidator all the property, real and personal, of the company, and how and to whom and for what consideration and when the company disposed of any part thereof, except such part as has been disposed of in the ordinary way of the business of the company;

(ii)does not deliver up to the liquidator, or as the liquidator directs, all such part of the real and personal property of the company as is in the person’s custody or under their control, and which the person is required by law to deliver up;

(iii)does not deliver up to the liquidator, or as the liquidator directs, all books and papers in the person’s custody or under their control belonging to the company and which the person is required by law to deliver up;

(iv)within twelve months next before the commencement of the winding up or at any time thereafter conceals any part of the property of the company or conceals any debt due to or from the company;

(v)within twelve months next before the commencement of the winding up or at any time thereafter fraudulently removes any part of the property of the company; or

(vi)makes any material omission in any statement relating to the affairs of the company;

(vii)knowing or believing that a false debt has been proved by any person under the winding up, fails for the period of a month to inform the liquidator thereof;

(viii)after the commencement of the winding up prevents the production of any book or paper affecting or relating to the property or affairs of the company; or

(ix)within twelve months next before the commencement of the winding up or at any time thereafter, conceals, destroys, mutilates or falsities, or is privy to the concealment, destruction, mutilation, or falsification of, any book or paper affecting or relating to the property or affairs of the company;

(x)within twelve months next before the commencement of the winding up or at any time thereafter, makes or is privy to the making of any false entry in any book or paper affecting or relating to the property or affairs of the company;

(xi)within twelve months next before the commencement of the winding up or at any time thereafter, fraudulently parts with, alters or makes any omission in, or is privy to the fraudulent parting with, altering or making any omission in, any document affecting or relating to the property or affairs of the company;

(xii)after the commencement of the winding up or at any meeting of the creditors of the company within twelve months next before the commencement of the winding up, attempts to account for any part of the property of the company by fictitious losses or expenses;

(xiii)has within twelve months next before the commencement of the winding up or at any time thereafter, by any false representation or other fraud, obtained any property for or on behalf of the company on credit which the company does not subsequently pay for;

(xiv)within twelve months next before the commencement of the winding up or at any time thereafter, under the false pretence that the company is carrying on its business, obtains on credit, for or on behalf of the company, any property which the company does not subsequently pay for;

(xv)within twelve months next before the commencement of the winding up or at any time thereafter, pawns, pledges or disposes of any property of the company which has been obtained on credit and has not been paid for, unless such pawning, pledging or disposing is in the ordinary way of the business of the company; or

(xvi)is guilty of any false representation or other fraud for the purpose of obtaining the consent of the creditors of the company or any of them to an agreement with reference to the affairs of the company or to the winding up;

such person shall be punishable, in the case of the offences mentioned respectively in paragraphs (xiii), (xiv) and (xv) of this sub-section, with imprisonment for a term not exceeding five years, and, in the case of any other offence, with imprisonment for a term not exceeding two years:

Provided that it shall be a good defence to a charge under any of paragraphs (ii), (iii), (iv), (vi), (xiv) and (xv) of this sub-section if the accused proves that they had no intent to defraud, and to a charge under any of paragraphs (i), (viii), (ix) and (x) of this sub-section if the accused proves that they had no intent to conceal the state of affairs of the company or to defeat the law.

(b)Where any person pawns, pledges or disposes of any property in circumstances which amount to an offence under paragraph (xv) of sub-section (a), every person who takes in pawn or pledge or otherwise receives the property knowing it to be pawned, pledged or disposed of in such circumstances as aforesaid shall be punishable with imprisonment for a term not exceeding three years.

402. Meetings to ascertain wishes of creditors or contributories

(a)Where by this Law the Court is authorized in relation to winding up to have regard to the wishes of creditors or contributories, as proved to it by any sufficient evidence, the Court may, if it thinks fit for the purpose of ascertaining those wishes, direct meetings of the creditors or contributories to be called, held and conducted in such manner as the Court directs, and may appoint a person to act as chairman of any such meeting and to report the result thereof to the Court.

(b)In the case of creditors, regard shall be had to the value of each creditor’s debt.

(c)In the case of contributories regard shall be had to the number of votes conferred on each contributory by this Law, the constitution or the terms of their shares.

403. Documents of company to be evidence

Where any company is being wound up, all documents of the company and of the liquidators shall, as between the contributories of the company, be prima facie evidence of the truth of all matters purporting to be therein recorded.

404. Inspection of documents

After an order for a winding up by or subject to the supervision of the Court, the Court may make such order for inspection by creditors and contributories of the company of its documents as the Court thinks just, and any documents in the possession of the company may be inspected by creditors or contributories accordingly, but not further or otherwise.

405. Disposal of documents of company

(a)When a company has been wound up and is about to be dissolved, the documents of the company and of the liquidators may be disposed of as follows (that is to say):

(i)in the case of a winding up by or subject to the supervision of the Court, in such way as the Court directs; or

(ii)in the case of a voluntary winding up, in such way as the company by special resolution directs.

(b)After three years from the dissolution of the company, no responsibility shall rest on the company or the liquidators, or any person to whom the custody of the documents has been committed, by reason of the same not being forthcoming to any person claiming to be interested therein.

406.Power of Court to declare dissolution of company void

Where a company has been dissolved, the Court may at any time within two years of the date of the dissolution, on an application being made for the purpose by the liquidator of the company or by any other person who appears to the Court to be interested, make an order, upon such terms as the Court thinks fit, declaring the dissolution to have been void, and thereupon such proceedings may be taken as might have been taken if the company had not been dissolved.

407.It shall be the duty of the person on whose application an order under section 406 was made, within 21 days after the making of the order, to file with the Registrar a certified copy of the order, and if that person fails so to do he shall be liable to a fine of 250,000 kyats.

408. Information as to pending liquidations

(a)Where a company is being wound up, if the winding up is not concluded within one year after its commencement, the liquidator shall, once in each year and at intervals of not more than twelve months, until the winding up is concluded, file in Court or with the Registrar, as the case may be, a statement in the prescribed form with respect to the proceedings in and position of the liquidation.

(b)Any person stating himself in writing to be a creditor or contributory of the company shall be entitled, themselves or by their agent, at all reasonable times, on payment of the prescribed fee, to inspect the statement, and to receive a copy thereof or extract therefrom; but any person untruthfully so stating themselves to be a creditor or contributory shall be deemed to be guilty of an offence under section 182of the Penal Code, and shall be punishable accordingly on the application of the liquidator.

(c)When the statement is filed in Court a copy shall simultaneously be filed with the Registrar and shall be kept by the Registrar along with the other records of the company.

409.If a liquidator fails to comply with the requirements of section 408, they shall be liable to a fine of 250,000 kyats.

410. Payments of liquidator into bank

(a)Every liquidator of a company which is being wound up by the Court shall, in such manner and at such times as may be prescribed, pay the money received by the liquidator into a scheduled bank:

Provided that if the Court is satisfied that for the purpose of carrying on the business of the company or of obtaining advances or for any other reason it is for the advantage of the creditors or contributories that the liquidator should have an account with any other bank, the Court may authorize the liquidator to make his payments into or out of such other bank as the Court may select and thereupon those payments shall be made in the prescribed manner.

(b)If any such liquidator at any time retains for more than 10 days a sum exceeding an amount of 500,000 kyats, or such other amount as the Court may in any particular case authorize the liquidator to retain, then, unless the liquidator explains the retention to the satisfaction of the Court, the liquidator shall pay interest on the amount so retained in excess at the rate of twenty per cent. per annum and shall be liable to disallowance of all or such part of the liquidator’s remuneration as the Court may think just and to be

removed from their office by the Court, and shall be liable to pay any expenses occasioned by reason of their default.

(c)A liquidator of a company which is being wound up shall open a special banking account and pay all sums received by them as liquidator into such account.

411. Court or person before whom affidavit may be sworn

(a)Any affidavit required to be sworn under the provisions or for the purposes of this Part may be sworn in the Union, or elsewhere, before any Court, Judge or person lawfully authorized to take and receive affidavits, or in any place outside the Union before any Consul, Vice-Consul or Ambassador of the Union.

(b)All Courts, Judges, Justices, Commissioners, and persons acting judicially in the Union shall take judicial notice of the seal or stamp or signature (as the case may be) of any such Court, Judge, person, Ambassador, Consul or Vice-Consul attached, appended or subscribed to any such affidavit or to any other document to be used for the purposes of this Part.

Rules for winding up

412. Power of Supreme Court to make rules

(a)The Supreme Court may, from time to time, make rules consistent with this Law and with the Code of Civil Procedure concerning the mode of proceedings to be had for winding up a company in such Court and in the Courts subordinate thereto, and for voluntary winding up (both members’ and creditors’), for the holding of meetings of creditors and members in connection with proceedings under section 287 of this Law, and generally for all applications to be made to the Court under the provisions of this Law, and shall make rules providing for all matters relating to the winding up of companies which, by this Law, are to be prescribed.

(b)Without prejudice to the generality of the foregoing power, the Supreme Court may by such rules enable or require all or any of the powers and duties conferred and imposed on the Court by this Law, in respect of the matters following, to be exercised or performed by the official liquidator and subject to the control of the Court, the powers and duties of the Court in respect of:

(i)holding and conducting meetings to ascertain the wishes of creditors and contributories;

(ii)settling lists of contributories and rectifying the register of members where required, and collecting and applying the assets;

(iii)requiring delivery of property or documents to the liquidator;

(iv)making calls;

(v)fixing a time within which debts and claims must be proved.

(c)In exercising any such powers the official liquidator shall not, without the special leave of the Court, rectify the register of members, and shall not make any call without the special leave of the Court.

Division 27: Winding up of unregistered companies

413.Winding up of unregistered companies

(a)For the purposes of this Division 27, an “unregistered company” shall not include a company registered under this Law, but shall include any corporation, partnership, association or body corporate that may have been established under any other applicable law.

(b)Subject to the provisions of this Part, and subject to any other applicable law, any unregistered company may be wound up under this Law, and all the provisions of this Law with respect to winding up shall apply to an unregistered company, with the following exceptions and additions:

(i)the principal place of business of the company in the Union shall be deemed to be the registered office of the company;

(ii)no unregistered company shall be wound up under this Law voluntarily or subject to supervision;

(iii)the circumstances in which an unregistered company may be wound up are as follows (that is to say):

(A)if the unregistered company is dissolved, or has ceased to carry on business or is carrying on business only for the purpose of winding up its affairs;

(B)if the unregistered company is unable to pay its debts; or

(C)if the Court is of opinion that it is just and equitable that the unregistered company should be wound up; and

(iv)an unregistered company shall, for the purposes of this Law, be deemed to be unable to pay its debts:

(A)if a creditor, by assignment or otherwise, to whom the company is indebted in a sum exceeding an amount of 500,000 kyats then due, has served on the unregistered company, by leaving at its principal place of business, or by delivering to a director or officer of the company, or by otherwise serving in such manner as the Court may approve or direct, a demand under his hand requiring the unregistered company to pay the sum so due, and the unregistered company has for 21 days after the service of the demand neglected to pay the sum, or to secure or compound for it to the satisfaction of the creditor;

(B)if any suit or other legal proceeding has been instituted against any member for any debt or demand due, or claimed to be due, from the unregistered company or from him in his character of member, and notice in writing of the institution of the suit or other legal proceeding having been served on the unregistered company by leaving the same at its principal place of business or by delivering it to a director, or officer of the unregistered company, or by otherwise serving the same in such manner as the Court may approve or direct, the unregistered company has

not within 10 days after service of the notice paid, secured or compounded for the debt or demand, or procured the suit or other legal proceeding to be stayed, or indemnified the defendant to his reasonable satisfaction against the suit or other legal proceeding, and against all costs, damages and expenses to be incurred by him by reason of the same;

(C)if execution or other process issued on a decree or order obtained in any Court in favour of a creditor against the unregistered company, or any member thereof as such, or any person authorized to be sued as nominal defendant on behalf of the unregistered company, is returned unsatisfied; and

(D)if it is otherwise proved to the satisfaction of the Court that the unregistered company is unable to pay its debts.

(c)Nothing in this Part shall affect the operation of any law which provides for any corporation, partnership, association or unregistered company being wound up, or being wound up as a company or as an unregistered company under any law repealed by this Law, except that references in any such first-mentioned law to any such repealed enactment shall be read as references to the corresponding provision (if any) of this Law.

414. Contributories in winding up of unregistered companies

(a)In the event of an unregistered company being wound up, every person shall be deemed to be a contributory who is liable to pay or contribute to the payment of any debt or liability of the company, or to pay or contribute to the payment of any sum for the adjustment of the rights of the members among themselves, or to pay or contribute to the payment of the costs and expenses of winding up the unregistered company, and every contributory shall be liable to contribute to the assets of the unregistered company all sums due from them in respect of any such liability as aforesaid.

(b)In the event of any contributory dying or being adjudged insolvent, the provisions of this Law with respect to the legal representatives and heirs of deceased contributories, and to the assignees of insolvent contributories, shall apply.

415. Power to stay or restrain proceedings

The provisions of this Law with respect to staying and restraining suits and legal proceedings against a company at any time after the presentation of a petition for winding up and before the making of a winding up order shall, in the case of an unregistered company, where the application to stay or restrain is by a creditor, extend to suits and legal proceedings against any contributory of the unregistered company.

416. Suits stayed on winding up order

Where an order has been made for winding up an unregistered company, no suit or other legal proceedings shall be proceeded with or commenced against any contributory of the unregistered company in respect of any debt of the unregistered company, except by leave of the Court, and subject to such terms as the Court may impose.

417.Directions as to property in certain cases

If an unregistered company has no power to sue and be sued in a common name, or if for any reason it appears expedient, the Court may, by the winding up order or by any subsequent order, direct that all or any part of the property, moveable or immoveable, including all interests and rights in, to and out of property, moveable and immoveable, and including obligations and actionable claims as may belong to the unregistered company or to trustees on its behalf, is to vest in the official liquidator by his official name, and thereupon the property or the part thereof specified in the order shall vest accordingly; and the official liquidator may, after giving such indemnity (if any) as the Court may direct, bring or defend in his official name any suit or other legal proceeding relating to that property, or necessary to be brought or defended for the purposes of effectually winding up the unregistered company and recovering its property.

418. Provisions of this Part cumulative

The provisions of this Part with respect to unregistered companies shall be in addition to, and not in restriction of, any provisions hereinbefore in this Law contained with respect to winding up companies by the Court, and the Court or official liquidator may exercise any powers or do any act in the case of unregistered companies which might be exercised or done by it or him in winding up companies formed and/ or registered under this Law; but an unregistered company shall not, except in the event of its being wound up, be deemed to be a company under this Law, and then only to the extent provided by this Part.

 
 


 
 

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