Winding up of a Company
The winding up or liquidation of a Company means the termination of the legal existence of a Company by stopping its business, collecting its assets and distributing the assets among creditors and shareholders in the manner laid down in the Act. It is also defined as a procedure by which the life of a company is brought to an end and its property administered for the assistance of its members and creditors. The term ‘winding up a company’ is used in multiple insolvency situations and refers to several types of company closure.
According to Professor Gower winding up of a company represents the process whereby its life is ended and its property administrated for the benefit of its creditors and members. Winding up is one of the methods by which dissolution of a company is brought about. There are three methods of winding up a Company:
- Compulsory winding up by the Tribunal.
- Voluntary Winding Up by the members themselves or by the creditors.
- Voluntary Winding Up under the supervision of the Tribunal.
Winding Up is a term used in business for closing, dissolving or shutting down a company. Compulsory Winding Up takes place when a Company is directed to be wound up by an order of Tribunal.