Lorna, Melva and Donna are three sisters and shareholders in Growing Green Limited, a private company...

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Lorna, Melva and Donna are three sisters and shareholders in Growing Green Limited, a private company limited by shares. The company was incorporated in May 2014, with 1000 shares, and specializes in the sale and rental of plants. Lorna and Melva each held 800 of the 1000 shares and Donna the remaining 200 shares. All three sisters are directors, of the company, with Lorna also being the company secretary. For the first five years of operation, the company had experienced an annual growth in its profit margin and all three sisters were happy about the major investment that they had made in the company. However, over the last three (3) years, profits have been steadily declining. With the advent of the COVID-19 Epidemic the company had lost many of customers who would rent plants for major events. Even though things have gone back to normal, the company has not seen any change in its financial position. At the start of this year, on receiving the audited financial statements, there was no improvement in the trend of the declining profits. The directors decided to call a meeting where they all agreed that since the company is still solvent, they should take steps to have it wound up. Based on the facts presented above, Growing Green Limited has come to you for advice: Using the Companies Act 2004 and related Amendments to the Act you are required to: a) Recommend the type of winding up that would be appropriated based on the circumstances outlined above and provide reasons in support of your recommendation; b) Outline to the company the detailed procedure to achieve the type of winding up recommended; Lorna, Melva and Donna are three sisters and shareholders in Growing Green Limited, a private company limited by shares. The company was incorporated in May 2014, with 1000 shares, and specializes in the sale and rental of plants. Lorna and Melva each held 800 of the 1000 shares and Donna the remaining 200 shares. All three sisters are directors, of the company, with Lorna also being the company secretary. For the first five years of operation, the company had experienced an annual growth in its profit margin and all three sisters were happy about the major investment that they had made in the company. However, over the last three (3) years, profits have been steadily declining. With the advent of the COVID-19 Epidemic the company had lost many of customers who would rent plants for major events. Even though things have gone back to normal, the company has not seen any change in its financial position. At the start of this year, on receiving the audited financial statements, there was no improvement in the trend of the declining profits. The directors decided to call a meeting where they all agreed that since the company is still solvent, they should take steps to have it wound up. Based on the facts presented above, Growing Green Limited has come to you for advice: Using the Companies Act 2004 and related Amendments to the Act you are required to: a) Recommend the type of winding up that would be appropriated based on the circumstances outlined above and provide reasons in support of your recommendation; b) Outline to the company the detailed procedure to achieve the type of winding up recommended;

Answer rating: 100% (QA)

ANSWER Based on the circumstances outlined above the appropriate type of winding up for Growing Green Limited would be a voluntary winding up specific... View the full answer