Unfair Preference in winding up

A company does something or suffers anything which lead to an effect of putting a creditor or guarantor into a better position in the event of insolvent liquidation, such action is regarded as an unfair preference.

Relevant time for such unfair preference, is a time in the period of 6 months before the commencement of winding up.

Under the circumstance of associate person who is connected with the company, the relevant time will become 2 years before the commencement date of winding up.

The definition of Associate Person is stated in s.265B and s.265C of Companies (Winding Up and Miscellaneous Provisions), such as Spouse; Cohabitant; Partnership; Stepchild; Adopted Child; Employee; Associate Company………..etc

Court may make such transactions being voidable