The Lower Eastern Times Opening The Third Eye
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A move to dissolve a dormant transport company in Siaya County has failed after the High Court rejected a petition seeking its liquidation, citing a lack of proper evidence and legal procedure.
The case involved two directors who had asked the Siaya High Court to wind up a transport firm registered on April 30, 2009, arguing that it had never operated, owned assets, or held any capital since its incorporation.
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According to the petitioners, the company was defunct, debt-free, and had already been resolved by its directors to be struck off the register. They supported their claim with an affidavit and a joint witness statement, asserting that a meeting held on November 7, 2024, had passed a resolution to liquidate the firm.
However, Justice David Kemei, who presided over the matter, found that the evidence provided did not meet the requirements set out in the Insolvency Act. The attached minutes from the alleged meeting, the judge noted, only referred to the opening and operation of an eCitizen account, and made no mention of any resolution to dissolve the company.
“The only resolution made was authorizing one of the directors to open and operate an eCitizen account. There was no record of any decision to liquidate the company,” Justice Kemei stated.
Even though the petition was not opposed by the Official Receiver, the judge ruled that a formal company resolution was mandatory before liquidation could be ordered.
“As no resolution was made regarding the company’s liquidation, the petition lacks merit,” he said, dismissing the application with no order as to costs.
The ruling means that the company remains legally in existence despite being inactive and without assets. The decision underscores the importance of adhering to corporate governance laws, even when a business is dormant or non-operational.
