Introduction
Winding up a company means to end all business affairs in order
to permanently close a company. Winding up is a process by
means of which the affairs of a company are wound up in a
manner to dissolve the company and put an end to the life of a
Company.
In the process of winding up, the company’s assets and properties
are administered for the benefit of the members and creditors of
the Company. The administrator, called liquidator, realises its
assets, pays its debts and finally distributes the surplus, if any,
among the members/creditors, in accordance with their right as
provided in the article of the Company.
The term “Winding Up” and “liquidation” are used
interchangeably.
Liquidation&is the process of closing a business and distributing its
assets to creditors and shareholders.
Liquidation can be voluntary, or compulsory.
In the case of voluntary, it is initiated by the company’s directors
or shareholders.
The purpose of liquidation is to dissolve the company, sell its
assets, and use the proceeds to pay off its debts in an organised
and equitable way.
There are two types of voluntary liquidation namely, members’
voluntary liquidation and creditors’ voluntary liquidation.
