Winding up of Modaraba

Following are the provisions in this regard.

A Modaraba floated for a fixed period of time or or achievement of a certain objective shall be wound up by the Modaraba company itself when that period has expired or that objective has been achieved.
It can also be voluntarily wounded up if all the directors of a Modaraba company make a declaration verified by affidavit, stating that they thoroughly examined the affair of Modaraba and they are of the opinion that Modaraba will be able to discharge its liabilities and also able to pay the amount subscribed by the certificate holder within a period of twelve months. This declaration and affidavit shall also be supported by a report of the auditor of the Modaraba.
A Modaraba can also be wound up by the Tribunal on an application made by the registrar if

1. In case of Modaraba that was formed for a fixed period of time and on the expiry of that time period, the Modaraba is not voluntarily wound up its management. Similarly condition will apply to a Modaraba that has been formed for a specific objective.
2. In case of any other Modaraba the Registrar has declared that:

* The Modaraba is unable to pay off its liability.
* The accumulated loses of Modaraba exceed 50% of the total capital of Modaraba
* The business of Modaraba is of fraudulent nature.

The tribunal can also windup any Modaraba if in the opinion of Tribunal it is fair and equitable to do so.