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KembaraXtra – Legal Terms – Just and Equitable Winding-Up
Just and equitable winding-up refers to a court-ordered compulsory liquidation of a company on the basis that fairness requires it. This ground is provided under the Insolvency Act 1986 and is typically used in situations where continuing the company would be unjust.
This may arise when the company’s purpose can no longer be fulfilled, where there is a breakdown in management (deadlock), or where those in control have acted unfairly or improperly. It is especially relevant in small private companies built on mutual trust, where members may have a shared understanding that has been breached. However, courts will not grant such an order if a more suitable remedy exists, such as relief for unfair prejudice under company law. The remedy is therefore considered a last resort to ensure fairness among shareholders.
Just and equitable winding-up refers to a court-ordered compulsory liquidation of a company on the basis that fairness requires it. This ground is provided under the Insolvency Act 1986 and is typically used in situations where continuing the company would be unjust.
This may arise when the company’s purpose can no longer be fulfilled, where there is a breakdown in management (deadlock), or where those in control have acted unfairly or improperly. It is especially relevant in small private companies built on mutual trust, where members may have a shared understanding that has been breached. However, courts will not grant such an order if a more suitable remedy exists, such as relief for unfair prejudice under company law. The remedy is therefore considered a last resort to ensure fairness among shareholders.
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