Section 714 CAMA 2020
Section 714 Companies and Allied Matters Act is about Arrangement on sale of company’s property during members’voluntary winding-up. It is under Chapter 27 (Arrangements and compromise) of the Act.
(1) With a view to effecting any arrangement, a company may by special resolution resolve that the company be put into members’ voluntary winding-up and that the liquidator be authorised to sell the whole or part of its undertaking or assets to another body corporate, whether a company within the meaning of this Act or not (in this section called “the transferee company”)in consideration or part consideration of fully paid shares, and to distribute the same in specie among the members of the company in accordance with their rights in the liquidation.
(2) Any sale or distribution in pursuance of a special resolution under this section is binding on the company and all its members and each member shall be deemed to have agreed with the transferee company to accept the fully paid shares, debentures, policies, cash or other like interests to which heis entitled under such distribution :
Provided that if—
(a) within one year from the date of the passing of any special resolution as is referred to in subsection (1), an order is made under sections 353 -355 of this Act dealing with relief on the grounds of unfairly prejudicial and oppressive conduct or for the winding-up of the company under a creditors’voluntary winding-up, the arrangement for the sale and distribution shall not be valid unless sanctioned by the Court ; or
(b) any member of the company, by writing addressed to the liquidator and left at the registered office or head office of the company, within 30days after the passing of the resolution, dissents in respect of any of the shares held by him, the liquidator shall either abstain from carrying the resolution into effect or shall purchase such shares at a price to be determined in the manner provided by subsection (4).
(3) Any member who fails to signify his dissent in accordance withsubsection (2) is deemed to have accepted the resolution.
(4) If the liquidator elects to purchase the shares of any member who has expressed his dissent in accordance with subsection (2), the price payable shall be determined by agreement in the case of a private company in which aliens do not participate, and in the case of a public company or a private company in which aliens participate, by the Securities and Exchange Commission :
Provided that in the case of a private company in which no aliens participate—
(a) such price is determined by estimating what the member concerned would have received had the whole of the undertaking of the company been sold as a going concern for cash to a willing buyer and the proceeds, less the cost of winding-up, been divided amongst the members in accordance with their rights ; and
(b) the purchase money is paid by the company before the company is dissolved and be raised by the liquidator or, in default of any direction in the special resolution, in such manner as he may think fit as part of the expenses of the winding-up.
(5) Nothing contained in this section authorises any variation or abrogation of the rights of any creditor of the company.
(6) If any company, otherwise than under this section, sells or resolves to sell the whole or part of its undertaking or assets to another body corporate in consideration or part consideration of any shares, debentures, policies or other like interest in that body corporate, and resolves to distribute the same in specie among members of the company (whether in liquidation or by way of dividend), any member of the company may by notice in writing addressed to the company and left at the registered office or head office of the company within 30 days after the passing of the resolution authorising such distribution,require the company either to abstain from carrying the resolution into effector to purchase any of his shares at a price to be determined in the manner provided by subsection (4).
(7) Nothing contained in subsection (6) authorises any company to purchase its own shares or make any distributions to its shareholders except in accordance with the provisions of this Act.
