Section 572 CAMA 2020

Section 572 Companies and Allied Matters Act is about Definition of inability to pay debts. It is under Chapter 21 (Winding-up by the court jurisdiction) of the Act.

A company is deemed to be unable to pay its debts if—

(a) a creditor, by assignment or otherwise, to whom the company is indebted in a sum exceeding N200,000, then due, has served on the company,

by leaving it at its registered office or head office, a demand under his hand requiring the company to pay the sum due, and the company has for three weeks thereafter neglected to pay the sum or to secure or compound for it to the reasonable satisfaction of the creditor ;

(b) execution or other process issued on a judgment, act or order of any Court in favour of a creditor of the company is returned unsatisfied in whole or in part ; or

(c) the Court, after taking into account any contingent or prospective liability of the company, is satisfied that the company is unable to pay its debts.