Compulsory liquidation

Court-ordered liquidation in South Africa

A creditor owed at least R100 can serve a demand under section 345 of the 1973 Act; if it goes unpaid for three weeks the company is deemed unable to pay its debts and the creditor may apply to the High Court under section 344. The court usually grants a provisional winding-up order first, with a return date on which interested parties may oppose it, and then a final order.

The Master appoints a provisional liquidator straight away. Form J28 lists the provisional orders, Form J29 the first meetings, and Forms 1, 4 and 5 follow as the estate is realised and dividends are paid. Solvent companies are wound up by the court under section 81 of the 2008 Act instead.

428 entities, 41 of them close corporations; Gauteng has the most.