Liquidations / Winding-ups

In TCI liquidations may accomplished either voluntary resolution of the shareholders or compulsory by order of the court. A third but less satisfactory alternative (from the perspective of potential ongoing liability) is the routine striking off the Register of defunct companies either by request or for failure to file annual returns.

Voluntary winding-up

A company may be wound-up voluntarily:

• When the period fixed for the duration of the company by its Articles of Association expires;

• The occurrence of an event specified in the Articles of Association as being the time when dissolution will take place and when an ordinary resolution to that effect has been passed.

• Upon the triggering of a specified event and without the need for an ordinary resolution.

Voluntary winding-ups usually take place upon the passing of a special resolution of the shareholders or where the company cannot continue its business by reason of its liabilities upon the passing of an ordinary resolution of the shareholders.

Once winding-up has commenced, the company must cease to carry on its business except as necessary for the winding-up. The liquidation is carried out by one or more liquidators appointed by the company in general meeting or, in the case of an automatic winding-up, appointed by the Articles of Association and upon such appointment the directors powers normally cease.

The commencement of the winding-up requires to be gazetted. Upon the completion of the winding-up the liquidator will call a general meeting at which a liquidation accounts will be presented to the shareholders. A notice relating to this meeting must also be published in the TCI legal Gazette at least one month before the meeting. The liquidator will make a return of the meeting to the Registrar of Companies and three months after the registration of such return, the company will be deemed to be dissolved.

Where a creditor believes that his rights are prejudiced by a voluntary winding-up he may petition the Supreme Court of the Turks & Caicos Islands and if the courts see fit it may order that such winding-up continue under its supervision.
Winding-up by the Court

A company may be wound-up by the court in certain circumstances. The most common of which are that the company is unable to pay its debts or that the court is of the opinion that it is just an equitable that the company should be wound-up. Winding-up is commenced by petition presented by the company, by a contributory or by a creditor and the company is deemed to be in liquidation from the time of the presentation of the petition. The company will be dissolved from a date of an order of the Supreme Court to that effect and this order will be made when the liquidator appointed by the court reports that the liquidation is complete.

Striking off defunct companies

Where the Registrar of Companies has reason to believe that a company is not in operation or is not carrying on business, he may strike the company off the register and the company will thereupon be dissolved. However, a creditor or any member aggrieved by the striking off may apply to the courts to have the company reinstated. A fee equal to the relevant incorporation fee for the company is payable upon reinstatement plus all unpaid annual fees. If such a company has assets at the time of striking off, those assets vest in the Governor of the Turks & Caicos Islands.

Corporation Services Limited can facilitate voluntary liquidations where companies are not insolvent. Our attorneys will also provide advice and assistance in insolvency and where a creditors winding up has been initiated.  We are also happy to assist with reinstatements.