Winding up of a Business

Learn with Meg Rayan about Winding-up

Case breakdown: Movie You’ve got mail

The scene that you just saw shows, Kathelene Kelly (played by Meg Ryan) is closing down her book store because she can no longer sustain it. A bigger book store (Fox) had opened right around the corner and this has led to decline in her sales. She is winding up her business and is leaving the store.

What is Winding up of a business?

Winding up of a company is the process through which life of a company comes to an end and its property is administered for the benefit of its members & creditors.

Winding up is a legal procedure, it can be either voluntary or a compulsory. When the company has to wound up compulsorily then a liquidator is appointed. An administrator is sometimes called a liquidator. A liquidator takes control and pays debts and distributes what is left amongst the members.

When there is no intervention of court, it is called a voluntary winding up. The entire process is done without any court supervision, similar to the scene that we saw. Voluntary winding-up is done either by the members or the creditors.

When the court intervenes, it is called as compulsory winding up. Petition for compulsory winding up of a company may be filed in the Tribunal by any of the following persons.

A company is said to be dissolved when it ceases to exist as a corporate entity. On dissolution, the company’s name shall be struck off by the Registrar from the Register of Companies and he shall also get this fact published in the Official Gazette.

 

 

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