Winding up is the liquidation of Company’s assets that are collected and sold in order to pay the debts incurred. When the company winding up takes place, firstly the debts, expenses, and costs are paid away and distributed among the shareholders.
Winding up is the legal mechanism to shut down a company and cease all the activities that re carried on . After the Company, winding up the existence of the Company comes to an end and the assets are monitored so that the stakeholders interest is not hampered.
Types of Company windup
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Voluntary winding up of a Company
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Compulsory winding up of a company
Voluntary Winding up of A Company
The Company in general meeting passes a resolution that requires a company to wind up voluntarily because of the expiry of the period of its duration, any as per the Articles of Association or on the occurrence of any event in respect of which the articles of association provide that the company should be dissolved.
Compulsory winding up of a Private Limited Company
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Unpaid debts of a Company
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When a special resolution is passed fort winding up
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An unlawful act by a company or the management of the Company
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If the company is involved in fraudulent acts or misconduct
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If the annual returns or financial statements are not filed for five consecutive years with the ROC
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The Tribunal is of the view that the company should windup.