Friendly Societies Act, 1956 (Act No. 25 of 1956)Chapter V : Enquiries and Investigations, Applications to Court, Cancellation or Suspension of Registration and Dissolution of Societies37. Voluntary or automatic dissolution of society |
| (1) | If the rules of a registered society provide for the dissolution or termination of such society upon the expiry of a period or upon the occurrence of an event, or upon a resolution by the members of the society that such society shall be terminated, then upon the expiry of such period, or the occurrence of such event, or the passing of such resolution, such society shall, subject to the provisions of this section, be liquidated in the manner provided by such rules, and the assets of the society shall, subject to the provisions of this section, be distributed in the manner provided by the said rules. |
| (2) | As soon as such period has expired or such event has occurred or such resolution has been passed a person approved by the Authority shall be appointed as liquidator in the manner directed by the rules, or, if the rules do not contain directions as to such appointment, by the person managing the business of the society, and the liquidation shall be deemed to commence as from the date of such approval. |
| (3) | During such liquidation the provisions of this Act shall continue to apply to such society as if the liquidator were the person managing the business of the society. |
| (4) | The liquidator shall as soon as may be deposit with the Authority a preliminary account and a preliminary balance sheet signed and certified by him as correct, showing the assets and liabilities of the society at the commencement of the liquidation and the manner in which it is proposed to realize the assets and to discharge the liabilities, including any liabilities and contingent liabilities to or in respect of members. |
| (5) | The Authority may, in his discretion, direct the liquidator to furnish a report, drawn up by an independent valuator or other competent person nominated by the Authority, upon the preliminary account and preliminary balance sheet. |
| (6) | The preliminary account, preliminary balance sheet and report (if any) referred to in subsection (5), shall lie open at the office of the Authority, and at the registered office of such society, and where the registered office of the society is in any district other than the district wherein the office of the Authority is situate, at the office of the magistrate of the district in which the registered office of the society is situate, for inspection by interested persons for a period of thirty days. |
| (7) | The Authority shall, at the cost of such society, cause to be published in the Gazette or in a newspaper circulating in the district in which the registered office of such society is situate, or in both the Gazette and such newspaper, a notice stating the period during which and the places at which the preliminary account, preliminary balance sheet and report (if any) shall lie open for inspection as aforesaid, and such notice shall call upon all interested persons who have any objection to the said preliminary account, preliminary balance sheet and report (if any) to lodge their objections in writing with the Authority within a period stated in the notice, not being less than fourteen days as from the last day on which the aforesaid documents lie open for inspection. |
| (8) | If no objections are lodged with the Authority in terms of subsection (7), he shall direct the liquidator to complete the liquidation. |
| (9) | If objections are lodged with the Authority in terms of subsection (7), the Authority may, after considering the said objections, direct the liquidator to amend the preliminary account and preliminary balance sheet, or give such other directions relating to the liquidation as he thinks fit, provided such directions are not inconsistent with the rules of the society, and any such directions shall be binding upon the liquidator. |
| (10) | The liquidator shall, within fourteen days of the receipt by him of any direction of the Authority in terms of subsection (9), post a copy thereof to every member, shareholder and creditor of the society, and the liquidator or any person aggrieved by any such direction of the Authority may apply by motion to the court within twenty-eight days after such direction has been communicated to the liquidator, for an order to set aside the Authority’s decision, and the court may confirm the said decision, or make such order as it thinks fit. |
| (11) | If the Authority is satisfied that his directions, in so far as they have not been varied or set aside by the court, have been given effect to, he shall direct the liquidator to complete the liquidation. |
| (12) | The liquidator shall, within thirty days after the completion of the liquidation, lodge with the Authority a final account and a final balance sheet, signed and certified by him as correct, showing the assets and liabilities of the society at the commencement of the liquidation and the manner in which the assets have been realized and the liabilities, including any liabilities and contingent liabilities to or in respect of members, have been discharged. |
| (13) | The provisions of the Companies Act, 1973 (Act No. 61 of 1973), in so far as the said provisions relate to a voluntary winding-up in terms of the said Act, and in so far as they are applicable and not inconsistent with any provision of this Act, shall apply mutatis mutandis to the dissolution of a society in terms of this section. |
[Section 37(13) substituted by section 24 of Act No. 103 of 1979]
| (14) | All claims against the society shall be proved to the satisfaction of the liquidator, subject to a right of appeal to the court, and the liquidator may require any claim to be made on affidavit. |
| (15) | If the Authority is satisfied that the said account and balance sheet are correct and that the liquidation has been completed, he shall cancel the registration of the society and thereupon such society shall be deemed to be dissolved. |