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Jan 28
The modes of winding up refer to the different ways in which a company can be dissolved or liquidated. There are several modes of winding up, including:
1. Voluntary winding up: This occurs when the members or shareholders of a company pass a resolution to wind up the company voluntarily. It can be either a members' voluntary winding up, where the company is solvent and able to pay its debts, or a creditors' voluntary winding up, where the company is insolvent and unable to pay its debts.
2. Compulsory winding up: This is a court-ordered winding up of a company. It typically occurs when the company is unable to pay its debts and a creditor or shareholders petition the court to wind up the company. The court will appoint a liquidator to oversee the winding up process.
3. Winding up by the court: In certain circumstances, the court may order the winding up of a company even without a petition from creditors or shareholders. This can occur if the company has engaged in fraudulent or illegal activities, or if it is just and equitable to wind up the company.
4. Provisional liquidation: This is a temporary form of winding up that is ordered by the court to protect the assets of the company while a decision is being made on whether to wind up the company. A provisional liquidator is appointed to manage the affairs of the company during this period.
5. Members' voluntary liquidation: This is a type of voluntary winding up where the company is solvent and able to pay its debts. The members of the company pass a resolution to wind up the company and appoint a liquidator to distribute the assets of the company to the shareholders.
6. Creditors' voluntary liquidation: This is a type of voluntary winding up where the company is insolvent and unable to pay its debts. The creditors of the company pass a resolution to wind up the company and appoint a liquidator to sell the assets of the company and distribute the proceeds to the creditors.
These are the main modes of winding up a company, each with its own specific requirements and procedures. The choice of the mode of winding up depends on the financial situation of the company and the preferences of its shareholders or creditors.
1. Voluntary winding up: This occurs when the members or shareholders of a company pass a resolution to wind up the company voluntarily. It can be either a members' voluntary winding up, where the company is solvent and able to pay its debts, or a creditors' voluntary winding up, where the company is insolvent and unable to pay its debts.
2. Compulsory winding up: This is a court-ordered winding up of a company. It typically occurs when the company is unable to pay its debts and a creditor or shareholders petition the court to wind up the company. The court will appoint a liquidator to oversee the winding up process.
3. Winding up by the court: In certain circumstances, the court may order the winding up of a company even without a petition from creditors or shareholders. This can occur if the company has engaged in fraudulent or illegal activities, or if it is just and equitable to wind up the company.
4. Provisional liquidation: This is a temporary form of winding up that is ordered by the court to protect the assets of the company while a decision is being made on whether to wind up the company. A provisional liquidator is appointed to manage the affairs of the company during this period.
5. Members' voluntary liquidation: This is a type of voluntary winding up where the company is solvent and able to pay its debts. The members of the company pass a resolution to wind up the company and appoint a liquidator to distribute the assets of the company to the shareholders.
6. Creditors' voluntary liquidation: This is a type of voluntary winding up where the company is insolvent and unable to pay its debts. The creditors of the company pass a resolution to wind up the company and appoint a liquidator to sell the assets of the company and distribute the proceeds to the creditors.
These are the main modes of winding up a company, each with its own specific requirements and procedures. The choice of the mode of winding up depends on the financial situation of the company and the preferences of its shareholders or creditors.
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