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PART VIII - Unregistered Companies

Winding up of unregistered companies, except Friendly Societies

230. Subject as hereinafter mentioned, any partnership, association, or

company, except Friendly Societies established under the Friendly Societies' Acts

for the time being in force in the Territory, consisting of more than five

members, friendly and not registered under this Act, and hereinafter included

under the term "unregistered company" may be wound up under this Act, and all

the provisions of this Act with respect to winding up shall apply to such

company, with the following exceptions and additions -

(a) No unregistered company shall be wound up under this Act

voluntarily or subject to the supervision of the Court;

(b) The circumstances under which an unregistered company

may be wound up are as follows, that is to say -

(i) whenever the company is dissolved, has ceased to

carry on business, or is carrying on business only for

the purpose of winding up its affairs;

(ii) whenever the company is unable to pay its debts;

(iii) whenever the Court is of opinion that it is just and

equitable that the company should be wound up;

be deemed to be unable to pay its debts -

(i) whenever a creditor, by assignment or otherwise, to

whom the company is indebted, at law or in equity, in

a sum exceeding two hundred and forty dollars then

due, has served on the company, by leaving the same

at the principal place of business of the company, or by

delivering to the secretary or some director or principal

officer of the company, or by otherwise serving the

same in such manner as the Court may approve or

direct, a demand under his hand requiring the company

to pay the sum so due, and the company has, for the

space of three weeks succeeding the service of such

demand, neglected to pay such sum, or to secure or

compound for the same to the satisfaction of the

creditor;

(ii) whenever any action, suit or other proceeding has been

instituted against any member of the company for any

debt or demand due, or claimed to be due, from the

company, or from him in his character of member of

the company, and notice in writing of the institution of

such action, suit or other legal proceeding having been

served upon the company, by leaving the same at the

principal place of business of the company, or by

delivering it to the secretary, or some director, manager

or principal officer of the company, or by otherwise

serving the same in such manner as the Court may

approve or direct, the company has not within ten days

after service of such notice paid, secured, or

compounded for such debt or demand, or procured

such action, suit, or other legal proceeding to be stayed,

or indemnified the defendant, to his reasonable

satisfaction,- against such action, suit, or other legal

proceeding, and against all cost, damages, and

expenses to be incurred by him by reason of the same;

(iii) whenever execution or other process issued on a

judgment, decree, or order obtained in any Court in

favour of any creditor in any proceeding at law or in

equity instituted by such creditor against the company,

or any member thereof as such, or against any person

authorized to be sued as nominal defendant on behalf

of the company, is returned unsatisfied;

(iv) whenever it is otherwise proved to the satisfaction of

the Court that the company is unable to pay its debts.

Who to be deemed a contributory in event of unregistered

company being wound up

231. In the event of an unregistered company being wound up, every person

shall be deemed to be a contributory who is liable, at law or in equity, 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 amongst themselves, or to pay or contribute to the payment of the

costs, charges and expenses of winding up the company, and every such

contributory shall be liable to contribute to the assets of the company, in the

course of the winding up, all sums due from him in respect of any such liability

as aforesaid; but, in the event of the death or bankruptcy of any contributory, the

provisions hereinbefore contained with respect to the personal representatives,

heirs and devisees of a deceased contributory, and to the trustee of a bankrupt

contributory, shall apply.

Power of Court to restrain further proceedings

232. The Court, at any time after the presentation of a- petition for winding up

an unregistered company and before making an order for winding up the

company, may, upon the application of any creditor of the company, restrain

further proceedings in any action, suit or proceeding against any contributory of

the company, or against the company, as hereinbefore provided, upon such terms

as the Court thinks fit.

Effect of order for winding up unregistered company

233. Where an order has been made for winding up an unregistered company,

in addition to the provisions hereinbefore contained in the case of companies

formed under this Act, it is hereby further provided that no suit, action, or other

legal proceeding shall be commenced or proceeded with against any contributory

of the company in respect of any debt of the company, except with the leave of

the Court, and subject to such terms as the Court may impose.

Further provision in case of unregistered company

234. If any 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

order made for winding up such company, or by any subsequent order, direct

that all such property, real and personal (including all interest, claims, and rights

into and out of property, real and personal, and including things in action), as

may belong to or be vested in the company, or to or in any person or persons on

trust for or on behalf of the company, or any part of such property, is to vest in

the official liquidator or official liquidators by his or their official name or names,

and thereupon the same or such part thereof as may be specified in the order shall

vest accordingly; and the official liquidator or official liquidators, may, in his or

their official name or names, or in such name or names and after giving such

indemnity as the Court directs, bring or defend any actions, suits, or other legal

proceedings necessary to be brought or defended for the purposes of effectually

winding up the company and recovering the property thereof.

Provisions in this Part of Act cumulative

235. The provisions made by this Part with respect to unregistered companies

shall be deemed to be made in addition to and not in restriction of any provisions

hereinbefore contained with respect to winding up companies by the Court, and

the Court or official liquidator may, in addition to anything contained in this Part,

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 under

this Act; but an unregistered company shall not, except in the event of its being

wound up, be deemed to be a company under this Act, and then only to the extent

provided for by this Part.

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