The Cogency and Justifiability of the Just-andEquitable Grounds for Compulsory Winding-Up of Companies by the Courts in Nigeria.

Abstract

Incorporated companies are major contributors to the industrial, social and economic growth of any nation and carry with them numerous benefits to individuals, organizations and the society at large. Indeed, any company which does not justify its existence in any given society may face the wrath of being wound up. The expense of going through the courts to obtain an order of this type indicates the determination, and this is a method often used by large creditors and the banks. Hence, this study raises, and answers questions implicated in the cogency and justifiability of the “just-and-equitable” grounds for Compulsory Winding-Up of Companies by the Courts in Nigeria. It examines the circumstances under which the court may wound up a company, compulsorily, under the Nigerian company law, those entitled to apply for the order and the consequences thereof. In conducting this study, a jurisprudential and descriptive analysis has been carried out with the help of statutes and judicial authorities. The paper found that in Nigeria the most frequently invoked ground for winding up a company is its inability to pay its debt under Section 571 (d) of CAMA, 2020. The paper suggests that since the recovery of a debt is not a relief that can be sought in a winding-up petition under Sections 571(d), 572(a) and 573(b) of CAMA,
the courts should not be eager in granting a winding-up order; but must always weight all the facts and circumstances of each case before arriving at a decision, taking cognizance of the economic benefits of the continued existence of the company to the society.