Voluntary Liquidation or winding up a solvent company in South Africa. A company may be wound-up voluntary if the company has by special resolution resolved that it be so wound up . When applying for the voluntary liquidation of a company or close corporation sections 349 to 353 of the Companies Act 61 of 1973 (“the Act”) is applicable. Voluntary liquidation can be applied for by the members of creditors . If you are looking for assistance with winding up of your company or voluntary liquidation, please contact me via LinkedIn or at helpme@businessrescue.co.za. Nothing in this publication should be construed as legal advice from this firm. These publications are general summaries of developments or principles of interest that may not apply directly to specific circumstances. Professional advice should, therefore, be sought before any action is taken. Business Rescue cc is based in Pretoria, South Africa. If you are looking for assistance with winding up of your company or voluntary liquidation, please contact me via LinkedIn or at helpme@businessrescue.co.za. More info on the company can be found on our website: http://www.businessrescue.co.za/.

1. VOLUNTARY LIQUIDATION: 1973 COMPANIES ACT
A company may be wound-up voluntary if the company has by special resolution resolved that
it be so wound up1
. When applying for the voluntary liquidation of a company or close
corporation sections 349 to 353 of the Companies Act 61 of 1973 (“the Act”) is applicable.
Voluntary liquidation can be applied for by the members2
of creditors3
.
When members begin voluntary liquidation in terms of section 349 and 363 of the Act the
following procedure should be followed:
1. By special resolution4
;
2. Effective only if registered in terms of section 2005
; and
3. Prior to registration thereof security has been furnished to the satisfaction of the Master
of the payment of the debts of the company within a period not exceeding twelve
months form the commencement of the winding-up of the company6
; or
4. The Master has dispensed with security because –
 The directors declared under oath that the company has no debts7
; and
 a certificate by the auditor of the company that to the best of his knowledge and
belief and according to the records of the company, it has no debts8
.
5. Within 28 days after the special resolution has been registered, a certified copy thereof
must be lodged with the Master, plus if a further resolution was passed appointing a
liquidator a certified copy thereof9
;
6. A notice of the voluntary winding-up must be published in the Government Gazette
within 28 days after the special resolution has registered10
; and
7. A copy of the special resolution must within 14 days after registration thereof be
transmitted by the company to11
:
 the Sheriff of the province where the companies registered office is;
 the Sheriff of every province in which it appears that the company owns
property;
1
Sec 349 of the Act.
2
Sec 350 of the Act.
3
Sec 351 of the Act.
4
Sec 349 of the Companies Act 61 of 1973 (“the Act”).
5
Sec 350(1)(a) of the Act.
6
Sec 350(1)(b)(i) of the Act.
7
Sec 350(1)(b)(ii)(aa) of the Act.
8
Sec 350(1)(b)(ii)(bb) of the Act.
9
Sec 356(2)(a) of the Act.
10
Sec (2)(b) of the Act.
11
Sec 357(3) of the Act.

2.  every Registrar of Deed who maintains a register which shows that the
company owns property;
 every sheriff who hold property of the company under attachment.
In the creditor’s voluntary winding-up in terms of section 351 and 356 of the Act the procedure
is as follows:
1. Members must adopt a special resolution stating it is a creditors’ winding-up12
;
2. The special resolution must be registered in terms of section 200;
3. A statement of the companies affairs (CM100) verified under oath by the directors must
serve before the meeting where the special resolution is to be adopted13
;
4. Two certified copies of the CM100 must be lodged with the Master within 28 days after
the resolution has been registered;
5. The special resolution must be lodged with the Master and published in the
Government Gazette within 28 days after the resolution has been registered14
; and
6. Effect must be given to section 357(3) in regards to the notice to the Sheriff and the
Registrar of Deeds.
The principal difference between a members’ voluntary winding-up and a creditors’ winding-
up is that with a member’s voluntary winding-up the liquidator exercises his powers subject to
directions of the company in a general meeting, whereas in a creditors’ winding-up he is
subject to the directions of the creditors15
.
It is not competent to have a section 417 enquiry in the case of a creditors’ voluntary winding-
up, unless the Master or a creditor applies to court in terms of section 346(1)(e) to have the
company wound up by the Court.16
The following documents must be emailed to CIPC17
:
1. 3 x CM25A. All directors or members should sign this document;
2. 3 x CM26. All directors or members should sign this document;
3. 3 x Minutes of the meeting where the resolution was taken to voluntary liquidate the
company of close corporation. All directors of members must be present or one of the
12
Sec 351(1) of the Act.
13
Sec 363(1) of the Act.
14
Sec 356(2)(a) and (b) of the Act.
1515
Sec 386(3)(b) and (c) of the Act.
16
South African Philips (Pty) Ltd v The Master 2000 (2) SA 841 (N).
17
The email address used is liquidations@cipc.co.za

3. directors or members must have the power of attorney to sign on behalf of the other
directors of members;
4. 3 x Certified copy of the ID document of all the directors or members; and
5. 3 x CM100, certified by a commissioner of oaths.
Only certain provisions of the Act apply to a creditors’ voluntary winding-up. The sections
applicable to a creditors’ voluntary winding-up are namely:
1. Sec 351 – Creditors’ voluntary winding-up;
2. Sec 353(2)(a) – Effect of voluntary winding-up on status of company and on directors;
3. Sec 356(2)(a)(ii) – Notice of winding-up;
4. Sec 363(1) – Directors and others to submit statement of affairs;
5. Sec 386(3)(b) – General powers of liquidator;
6. Sec 390(1) proviso – Exercise of power of liquidator in voluntary winding-up to accept
shares for assets of company; and
7. Sec 422(1)(c) – Disposal of records of dissolved company.
351. Creditors' voluntary winding-up.
(1) A voluntary winding-up of a company shall be a creditors' voluntary winding-up if the
resolution contemplated in section 349 so states, but such a resolution shall be of no
force and effect unless it has been registered in terms of section 200.
(2) Unless otherwise provided, in a creditors' voluntary winding-up the liquidator may
without the sanction of the Court exercise all powers by this Act given to the liquidator
in a winding-up by the Court subject to such directions as may be given by the creditors.
353. Effect of voluntary winding-up on status of company and on directors.
(2) As from the commencement of a voluntary winding-up all the powers of the directors
of the company concerned shall cease except in so far as their continuance is
sanctioned-
(a) by the liquidator or the creditors in a creditors' voluntary winding-up.
356. Notice of winding-up of company.
(2) Any company which has passed a special resolution under section 349 for its voluntary
winding-up, shall within 28 days after the registration of that resolution in terms of
section 200 -
(a) lodge with the Master a certified copy of the resolution concerned, together
with-
(ii) in the case of a creditors' voluntary winding-up, two certified copies of the
statement referred to in section 363 (1); and
(b) give notice of the voluntary winding-up of the company in the Gazette.
363. Directors and others to submit statement of affairs.
(1) Where it is intended to pass a resolution for a creditors' voluntary winding-up of a
company, the directors of that company shall make out or cause to be made out, in the

4. prescribed form, a statement as to the affairs of the company and lay it before the
meeting convened for the purpose of passing such a resolution.
386. General powers.
(3) The liquidator of a company
a) in a winding-up by the Court, with the authority granted by meetings of creditors
and members or contributories or on the directions of the Master given under
section 387;
(b) in a creditors' voluntary winding-up, with the authority granted by a meeting of
creditors; and
(c) in a members' voluntary winding-up, with the authority granted by a meeting of
members, shall have the powers mentioned in subsection (4).
(4) The powers referred to in subsection (3) are-
(a) to bring or defend in the name and on behalf of the company any action or other
legal proceedings of a civil nature, and, subject to the provisions of any law
relating to criminal procedure, any criminal proceedings: Provided that
immediately upon the appointment of a liquidator and in the absence of the
authority referred to in subsection (3), the Master may authorise, upon such
terms as he thinks fit, any urgent legal proceedings for the recovery of
outstanding accounts;
(b) to agree to any reasonable offer of composition made to the company by any
debtor and to accept payment of any part of a debt due to the company in
settlement thereof or to grant an extension of time for the payment of any such
debt;
(c) to compromise or admit any claim or demand against the company, including
an unliquidated claim;
(d) except where the company being wound up is unable to pay its debts, to make
any arrangement with creditors, including creditors in respect of unliquidated
claims;
(e) to submit to the determination of arbitrators any dispute concerning the
company or any claim or demand by or upon the company;
(f) to carry on or discontinue any part of the business of the company may be
necessary for the beneficial winding-up thereof: Provided that, if he considers
it necessary, the liquidator may carry on or discontinue any part of the business
of the company concerned before he has obtained the leave of the Court or the
authority referred to in subsection (3), but shall not in that event be entitled, as
between himself and the creditors or contributories of the company, to include
the cost of any goods purchased by him in the costs of the winding-up of the
company unless such goods were necessary for the immediate purpose of
carrying on the business of the company and there are funds available for
payment of the cost of such goods after providing for the costs of winding-up;
(g) to exercise mutatis mutandis the same powers as are by sections 35 and 37 of
the Insolvency Act, 1936, (Act 24 of 1936), conferred upon a trustee under that
Act, on the like terms and conditions as are therein mentioned: Provided that
the powers conferred by section 35 aforesaid, shall not be exercised unless the
company is unable to pay its debts;
(h) to sell any movable and immovable property of the company by public auction,
public tender or private contract and to give delivery thereof;
(i) to perform any act or exercise any power for which he is not expressly required
by this Act to obtain the leave of the Court.
390. Exercise of power of liquidator in voluntary winding-up to accept shares
for assets of company.

5. (1) Where a company is proposed to be or is being wound up voluntarily and the whole or
part of its business or property is proposed to be transferred or sold to another
company, whether registered under this Act or not (in this section called the transferee
company), the liquidator of the first-mentioned company (in this section called the
transferor company) may, with the sanction of a special resolution of that company,
conferring either a general authority on the liquidator or an authority in respect of any
particular arrangement, receive in compensation or part compensation for the transfer
or sale, shares, policies or other like interests in the transferee company, for distribution
among the members of the transferor company, or may enter into any other
arrangement, whereby the members of the transferor company may, in lieu of receiving
cash, shares, policies or other like interests, or in addition thereto, participate in the
profits of or receive any other benefit from the transferee company: Provided that, in
the case of a creditors' voluntary winding-up, the powers of the liquidator conferred by
this section shall not be exercised save with the consent of three-fourths in number
and value of the creditors present or represented at a meeting called by him for that
purpose and of which not less than fourteen days' notice has been given, or with the
sanction of the Court.
422. Disposal of records of dissolved company.
(1) When any company has been wound up and is about to be dissolved, the books and
papers of the company and of the liquidator may be disposed of-
(c) in the case of a creditors' voluntary winding-up, in such way as the creditors
may direct.
Companies Act 71 of 2011
77. Liability of directors and prescribed officers
(1) In this section, ‘‘director’’ includes an alternate director, and—
(a) a prescribed officer; or
(b) a person who is a member of a committee of a board of a company, or of the
audit committee of a company, irrespective of whether or not the person is also
a member of the company’s board.
(2) A director of a company may be held liable—
(a) in accordance with the principles of the common law relating to breach of a
fiduciary duty, for any loss, damages or costs sustained by the company as a
consequence of any breach by the director of a duty contemplated in section
75, 76(2) or 76(3)(a) or (b); or
(b) in accordance with the principles of the common law relating to delict for any
loss, damages or costs sustained by the company as a consequence of any
breach by the director of—
(i) a duty contemplated in section 76(3)(c);
(ii) any provision of this Act not otherwise mentioned in this section; or
(iii) any provision of the company’s Memorandum of Incorporation.
(3) A director of a company is liable for any loss, damages or costs sustained by the
company as a direct or indirect consequence of the director having—
(a) acted in the name of the company, signed anything on behalf of the company,
or purported to bind the company or authorise the taking of any action by or on
behalf of the company, despite knowing that the director lacked the authority to
do so;
(b) acquiesced in the carrying on of the company’s business despite knowing that
it was being conducted in a manner prohibited by section 22(1);

6. (c) been a party to an act or omission by the company despite knowing that the act
or omission was calculated to defraud a creditor, employee or shareholder of
the company, or had another fraudulent purpose;
(d) signed, consented to, or authorised, the publication of—
(i) any financial statements that were false or misleading in a material
respect; or
(ii) a prospectus, or a written statement contemplated in section 101, that
contained—
(aa) an ‘untrue statement’ as defined and described in section 95; or
(bb) a statement to the effect that a person had consented to be a
director of the company, when no such consent had been given,
despite knowing that the statement was false, misleading or
untrue, as the case may be, but the provisions of section 104(3),
read with the changes required by the context, apply to limit the
liability of a director in terms of this paragraph; or
(e) been present at a meeting, or participated in the making of a decision in terms
of section 74, and failed to vote against—
(i) the issuing of any unauthorised shares, despite knowing that those
shares had not been authorised in accordance with section 36;
(ii) the issuing of any authorised securities, despite knowing that the issue
of those securities was inconsistent with section 41;
(iii) the granting of options to any person contemplated in section 42(4),
despite knowing that any shares—
(aa) for which the options could be exercised; or
(bb) into which any securities could be converted,
had not been authorised in terms of section 36;
(iv) the provision of financial assistance to any person contemplated in
section 44 for the acquisition of securities of the company, despite
knowing that the provision of financial assistance was inconsistent with
section 44 or the company’s Memorandum of Incorporation, to the
extent that the resolution or agreement has been declared void in terms
of section 44(5), read with section 218(1);
(v) the provision of financial assistance to a director for a purpose
contemplated in section 45, despite knowing that the provision of
financial assistance was inconsistent with that section or the company’s
Memorandum of Incorporation, to the extent that the resolution or
agreement has been declared void in terms of section 45(6), read with
section 218(1);
(vi) a resolution approving a distribution, despite knowing that the
distribution was contrary to section 46, subject to subsection (4);
(vii) the acquisition by the company of any of its shares, or the shares of its
holding company, despite knowing that the acquisition was contrary to
section 46 or 48; or
(viii) an allotment by the company, despite knowing that the allotment was
contrary to any provision of Chapter 4, to the extent that the allotment
or an acceptance is declared void under section 109(1) read with
section 218(1).
(4) The liability of a director in terms of subsection (3)(e)(vi) as a consequence of the
director having failed to vote against a distribution in contravention of section 46—
(a) arises only if—
(i) immediately after making all of the distribution contemplated in a
resolution in terms of section 46, the company does not satisfy the
solvency and liquidity test; and
(ii) it was unreasonable at the time of the decision to conclude that the

7. company would satisfy the solvency and liquidity test after making the
relevant distribution; and
(b) does not exceed, in aggregate, the difference between—
(i) the amount by which the value of the distribution exceeded the amount
that could have been distributed without causing the company to fail to
satisfy the solvency and liquidity test; and
(ii) the amount, if any, recovered by the company from persons to whom
the distribution was made.
(5) If the board of a company has made a decision in a manner that contravened this Act,
as contemplated in subsection (3)(e)—
(a) the company, or any director who has been or may be held liable in terms of
subsection (3)(e), may apply to a court for an order setting aside the decision
of the board; and
(b) the court may make—
(i) an order setting aside the decision in whole or in part, absolutely or
conditionally; and
(ii) any further order that is just and equitable in the circumstances,
including an order—
(aa) to rectify the decision, reverse any transaction, or restore any
consideration paid or benefit received by any person in terms of
the decision of the board; and
(bb) requiring the company to indemnify any director who has been
or may be held liable in terms of this section, including
indemnification for the costs of the proceedings under this
subsection.
(6) The liability of a person in terms of this section is joint and several with any other person
who is or may be held liable for the same act.
(7) Proceedings to recover any loss, damages or costs for which a person is or may be
held liable in terms of this section may not be commenced more than three years after
the act or omission that gave rise to that liability.
(8) In addition to the liability set out elsewhere in this section, any person who would be
so liable is jointly and severally liable with all other such persons—
(a) to pay the costs of all parties in the court in a proceeding contemplated in this
section unless the proceedings are abandoned, or exculpate that person; and
(b) to restore to the company any amount improperly paid by the company as a
consequence of the impugned act, and not recoverable in terms of this Act.
(9) In any proceedings against a director, other than for wilful misconduct or wilful breach
of trust, the court may relieve the director, either wholly or partly, from any liability set
out in this section, on any terms the court considers just if it appears to the court that—
(a) the director is or may be liable, but has acted honestly and reasonably; or
(b) having regard to all the circumstances of the case, including those connected
with the appointment of the director, it would be fair to excuse the director.
(10) A director who has reason to apprehend that a claim may be made alleging that the
director is liable, other than for wilful misconduct or wilful breach of trust, may apply to
a court for relief, and the court may grant relief to the director on the same grounds as
if the matter had come before the court in terms of subsection (9).