What is "winding up" or "liquidation"?

An insolvent Company can be subject to a creditors’ winding up or a members’ voluntary winding up. A compulsory winding up is where a creditor issues a petition for winding up the company on the basis, for example, that the company is unable to meet its debts. Section 122(1) sets out the grounds for a winding up order. This includes where the company has passed a special resolution that it be wound up by the Court. Also it includes where the company is unable to pay its debts. There is then a catch all where the Court is of the opinion that it is “just and equitable” that the company is wound up.

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