Meaning of Winding Up
Winding up means ending or dissolving a company. In other words, it is the process by which life of a company brought to an end. Winding up of company includes selling of assets, paying the creditors and distribution of remaining assets to the partners or shareholders. There are many reasons for winding up a company such as loss in business, company closure, passing away of promoters etc.
Law Governing The Procedure Of Winding Up
Section 270 of the company’s act 2013 governs the procedure of winding up of a company in India.
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Modes Of Winding Up a Company
There are two ways by which a company winds up its business –
- Winding up of a company by the tribunal
- Voluntarily winding up of a company by its members
Winding Up Of Company By a Tribunal
A company starts winding up its business after getting the order from the tribunal. It is also known as compulsory winding up of a company. In this case, court gives orders to the company to appoint a liquidator who takes control of the company, collect its assets, pay off the debts & distribute the profit among the members as per their rights.
Reasons For Company Wounded By a Tribunal
According to the companies act 2013, company can be wind up by a tribunal if –
Voluntary Winding Up Of A Company
Voluntary winding up of company means wounding up of a company by its members voluntarily. Winding up of a company can be done voluntarily by the members of the company, if –
Procedure Of Voluntarily Winding Up Of Company
The procedure of voluntarily winding up of a company is as follows –
Winding Up Of Company FAQ’S
There are two ways by which you can wind up the company –
There are two ways by which a company wind up its business –
- By the tribunal
- Voluntary winding up of a company