Circumstances that may lead to dissolution of a company
Answer Text: DISSOLUTION OF A COMPANYThe following are the circumstances that may lead to the dissolution of a company:-Failure to commence business within one year- If a company does not commence business within one year from the date of registration, it may be wound up by a court order on application of a member of the company.-Insolvency – when a company is not able to pay its debts, it can be declared insolvent and wound up.-Ultra- vires – this means a company is acting contrary to what is in its objective clause. In such a case, it may be wound up by a court order.-Amalgamation – two or more companies may join up to form one large company completely different from the original ones.-Court order – the court of law can order a company towind up especially following complaints from creditors.-Decision by shareholders – the shareholders may decide to dissolve a company in a general meeting.-Accomplishment of purpose or expiry of period of operation – a company may be dissolved on accomplishment of its objects, or on expiry of period fixed for its existence.