6. My company is in heavy debt. Some creditors have threatened to present a winding-up petition. I have therefore transferred all the company’s assets to my wife. A petition was presented 2 months after the transfer, and a winding-up order was eventually made. Can anyone go after my wife for the assets?

6. My company is in heavy debt. Some creditors have threatened to present a winding-up petition. I have therefore transferred all the company’s assets to my wife. A petition was presented 2 months after the transfer, and a winding-up order was eventually made. Can anyone go after my wife for the assets?

Yes. Any transfers or dispositions of assets made by a company within 2 years before the commencement of winding up can be set aside (made invalid) if the company does not receive full value for the transfer or disposition. This is called a transaction undervalue. If the transfer or disposition is made more than 2 years and within 5 years of the commencement of winding up, it can still be set aside if the company was insolvent or had become insolvent after the transfer or disposition.

Hence, in this case, the transfer can be set aside. The liquidator will go after your wife for the assets.

The situation is the same if your company sold your company’s assets (e.g. a piece of land) to a third party at an undervalue within 2 years before the commencement of winding up.

Generally, the date of commencement of winding up is the date of filing of the petition for winding up if it is a case of a winding up by the court.  In case of a voluntary winding up, the commencement date is the date of the resolution passed for winding up the company.