Dissolution And Winding Up Of Plcs Under The Ethiopian Law

Dissolution and winding up of companies comprise the beginning of termination proceedings,rnliquidation of the company’s assets and liabilities and the proceedings for the extinguishment ofrna company’s existence. The terms “dissolution” and “winding up” have different usages andrnmeanings in different legal systems. For the English and the British Commonwealth legalrnsystems, “dissolution” is the final stage in the proceeding of terminating a company’s existencernthat a company is said to be dissolved only if its assets are thoroughly collected, changed intorncash and distributed to those entitled persons i.e. creditors and shareholders.rnUnder the Ethiopian law, a company ceases to exist and losses its legal personality after thernCommercial registrar cancels its registration and its cancellation has been published in thernOfficial Commercial Gazette. In every Civil Law legal system, including the Ethiopian legalrnsystem, dissolution is the very first act that brings the termination of a company’s operations. Itrnis after the completion of the dissolution proceeding, either voluntarily or compulsorily, thernwinding up of the company is to be carried out that is to mean to liquidate the assets andrnliabilities of the company. Generally, dissolution and winding up of a company constitutes therninitial step or decision to end a company’s existence, finding out of its assets and paying off itsrnliabilities, as well as its final extinguishment.rnAs the principal focus of the study is the dissolution and winding up of PLCs under the Ethiopianrnlaw, this study strives to test the adequacy of the Ethiopian law in deliberating and resolving therndissolution and winding up of PLCs; and, in search of model solutions, this study make use ofrnthe comparative study of the laws of foreign jurisdictions that have a well developed legalrninfrastructure which could give us critical guidance to resolve the challenges we face in dealingrnwith the dissolution and winding up of PLCs under our legal system. The writer will also try tornuncover what the actual practice looks like from court decisions as well as interviews conductedrnto practitioners and experts.

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