Law · Corporate Law

A creditor is considering petitioning the court for the compulsory liquidation of a company under Section 122 of the Insolvency Act 1986. Which of the following scenarios would NOT provide a valid ground for the court to grant such an order?

Verified Solution4 OptionsUpdated: October 2026👁️1 View

1The company has failed to pay a dividend to its ordinary shareholders for two consecutive financial years.✓
2The company has suspended its business for a whole year.
3A public company has failed to obtain a trading certificate within 12 months of its incorporation.
4The company has passed a special resolution to be wound up by the court.

Correct answer

The company has failed to pay a dividend to its ordinary shareholders for two consecutive financial years.

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