Winding Up of a Company refers to the legal process of closing down the Company’s operations and bringing its existence to an end. This process involves settling the Company’s liabilities, selling off its assets and distributing any remaining assets to its shareholders or members. In Zanzibar, this process is governed primarily by the Companies Act No. 15 of 2013 and the accompanying Companies Regulations, 2017. These laws outline the necessary steps for dissolving a Company either voluntarily or compulsory.
Key Procedures for Voluntary Winding Up
- Notice of Resolution for Voluntary Winding Up
The Company’s board of directors must first convene a meeting where they pass a resolution to voluntarily wind up the Company. This decision is made after careful consideration and the resolution must be filed with the Registrar of Companies.
- Public Advertisement of Voluntary Winding Up
After the resolution is passed, the Company is required to publish a notice of voluntary winding up in both the Government Gazette and at least one widely circulated newspaper in Zanzibar. This announcement serves to notify creditors, stakeholders and the public; inviting any claims from creditors.
- Appointment of a Liquidator and Notification
A liquidator is appointed to oversee the winding-up process. Within 14 days of their appointment, the liquidator must file a notice of appointment (Form No. 14) with the Registrar of Companies. Additionally, this notice must be published in the Government Gazette and a local newspaper (Form No. 15). The liquidator’s primary responsibilities include:
- Settling the Company’s outstanding debts.
- Disposing of Company assets and distributing proceeds to the Company’s members, once all creditor claims are satisfied.
- Preparing detailed accounts of the winding-up process for review by Company members.
- Filing necessary documents with the Registrar.
- Return of Final Meeting and Dissolution
Upon completion of the winding-up process, the liquidator is required to hold a final meeting with the Company’s members. Afterward, the liquidator must file a return of the final meeting using Form No. 17.
- Dissolution by the Registrar
Once the Registrar receives the final account and the return as stipulated under Section 234(3) of the Companies Act, the documents are registered. After three months from the date of registration, the Company is considered legally dissolved, concluding the winding-up process.
Conclusion
The Winding Up process in Zanzibar offers a clear and systematic approach for Companies looking to close their operations while ensuring transparency and fairness to all stakeholders involved. By following the outlined legal steps, businesses can effectively wrap up their affairs. As Companies navigate this process, recent updates such as electronic filings provide greater convenience and efficiency. Understanding these procedures is crucial for any Company considering winding up, ensuring they fulfill their obligations under Zanzibar’s legal framework.
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