Explain four ways through which a public limited company may be dissolved.

Explain four ways through which a public limited company may be dissolved.

Ways through which a public limited company may be dissolved include:

1. A resolution by the shareholders to dissolve the company. When there is a unanimous decision by the shareholders to wind up the company during the annual general meeting.
2. Change in the country’s law that renders the activities of the company illegal/unlawful. When the laws of a country bars certain activities that the company may have been involved in.
3. Inability to repay financial debts on infringement of stakeholders’ rights.
4.  Amalgamations/mergers - a company may be dissolved if it combines with another and a new one replaces the one combining/creates a new entity.
5. Take overs/acquisition/absorption - a company may be dissolved if it is taken over by another/or by the government through acquisition of majority shares hence redirection of its activities/loss of identity.
6. Realization of sustained / continuous losses. A company may be dissolved when it makes losses continuously to the extent of not being able to meet its recurrent expenditure/insolvency.
7.  Court order for infringing on the law/granted to a complaint raised by stakeholders/acting ultravires.
8. Completion/fulfilment of task/activity/objective (for which the company was formed) hence making its continued existence unnecessary.
9.  Failure to commence business within one year after incorporation thus contravening the company’s act.

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