Winding up of company is a process by which the life of a company comes to an end. It is the liquidation of a company by which the company is dissolved. The assets of the company are disposed of, the debts are cleared by the realization of the assets, and the left out surplus is distributed among the members of the company as per their portion of holdings in the company.
When the winding-up of a company is done by the members of the company without the interference of the court it is said to be a voluntary winding up. It is further divided into two types: (a) Member’s voluntary winding up (b) Creditor’s voluntary winding up.
When the winding-up of a company is done by an order of the court it is called compulsory winding up. There may be various reasons for this such as:
These points are mentioned under section 433 of the companies act.
This type of winding up is accompanied by the supervision of the court. It occurs when the voluntary winding up of the company has already commenced. It is a voluntary winding up but under the supervision of the court. The court has the power to appoint or remove any liquidator, it may also enforce calls made by him. It also supervises the procedure in which the members take a resolution of winding up of the company in the general meeting.
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