Paul and John each hold 50% of the issued shares in PJ Limited. They are also the only directors of the company. During the past four months PJ Limited has been encountering fi nancial diffi culties and Paul and John believe that it is very unlikely that the situation will improve. Paul and John are thus seriously considering placing the company into liquidation and have been informed that they would have to prepare a declaration of solvency. Furthermore, six months ago the Court of Appeal confi rmed a judgement ordering PJ Limited to pay one of its creditors the sum of €10,000. To date this sum has not been paid.Required:

(b) Explain under which circumstances a company may be dissolved and wound up by the court. (3 marks)

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