EG 13.6 1Petitioning for compulsory winding up on just and equitable grounds

EG 13.6.1

1The FCA has power under section 367(3)(b) of the Act to petition the court for the compulsory winding up of a company or partnership, on the ground that it is just and equitable for the body to be wound up, regardless of whether or not the body is able to pay its debts. In some instances the FCA may need to consider whether to petition on this ground alone or in addition to the ground of insolvency.

EG 13.6.2

1When deciding whether to petition on this ground the FCA will consider all relevant facts including:

  1. (1)

    whether the needs of consumers and the public interest require the company or partnership to cease to operate;

  2. (2)

    the need to protect consumers' claims and client assets;

  3. (3)

    whether the needs of consumers and the public interest can be met by using the FCA's other powers;

  4. (4)

    in the case of an authorised person, where the FCA considers that the authorisation should be withdrawn or where it has been withdrawn, the extent to which there is other business that the person can carry on without authorisation;

  5. (5)

    in the case of an unauthorised company or partnership carrying on a regulated activity as part of a larger enterprise, the scale and importance of the unauthorised regulated activity and the extent to which the enterprise is likely to survive the restraint and remedying of that activity by the use of other powers available to the FCA having regard to any continuing risk to consumers;

  6. (6)

    whether there is reason to believe that an injunction to restrain the carrying on of an unauthorised regulated activity would be ineffective;

  7. (7)

    whether the company or partnership appears to be or to have been involved in financial crime or appears to be or to have been used as a vehicle for financial crime.

EG 13.6.3

1Where appropriate the FCA will also take the following factors into account:

  1. (1)

    the complexity of the company or partnership (as this may have a bearing on the effectiveness of winding up or any alternative action);

  2. (2)

    whether there is a significant cross border or international element to the business being carried on by the company or partnership and the impact on the business in other jurisdictions;

  3. (3)

    the adequacy and reliability of the company or partnership's accounting or administrative records;

  4. (4)

    the extent to which the company or partnership's management has co-operated with the FCA.