Case Study 3 (10 Marks)

Nads Handicraft Company Limited is in the business of selling handicrafts to tourists. It has been in operation for the past five years and has been making about $50,000 income every year. However, during the coronavirus pandemic and closure of international borders, the business has not been able to make enough income. The company also could not afford to pay the business rent every month. The directors and shareholders of the company were in a dilemma. While the directors of the company believed that the business should close down due to minimal income, the shareholders of the company believed that the business should remain in operation and wait for things to get normal. Creditors on the other hand, filed a lawsuit against the company for it to be wound up.

Required:

1. With reference to Companies Act of Fiji 2015, list five situations under which a company can be wound up. (5 marks)

2. Explain if the creditors in the above case would be successful in their claim. (5 Marks)