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What is the difference between winding up and dissolution of a company?
Wiki User
∙ 13y ago
Dissolution is part of winding up the business affairs of a company; it means the assets are distributed and the board of directors ceases to exist. Winding up includes paying taxes, terminating contracts, etc., leading to the proper time and conditions for dissolution. Some states require a waiting period, and it may vary for different types of companies (profit, non-profit, etc).
Wiki User
∙ 16y ago
Wiki User
∙ 13y agoWinding-up is a colloquial term for the legal term Liquidation, which is the process by which a company is brought to an end, and the assets and property of the company redistributed. Dissolution is the final stage of liquidation. After a company's affairs are "wound-up," a liquidator calls a final meeting of the members and/or creditors. The liquidator sends final accounts to the registrar and notifies the court; the company is then dissolved.
Wiki User
∙ 14y agoDissolution refers to the ceasing of operations and (generally) breaking apart of the assets of the company for sale. Everything changes...the company in virtually all respects is gone. A company does not have to be bankrupt to be dissolved....closing one and selling off the assets is enough. So, say a store in your town closes and ends business, and they sell off all inventory, fixtures, etc., take the sign down and give up that is dissolution. It may well have been profitable and paid all its bills and the closing sale profits go to the owner. Bankruptcy is a legal process that has many different forms.....in some the business continues, it is just the financial aspects, maybe ownership that changes. Smetimes certain aspects of the business are ended or closed. Almost always, it gets a fresh financial start and some creditors - like lenders and suppliers - may not get paid.
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What is a Winding up Petition & does it come under NCLT law?
The process by which a corporation's assets are gathered and sold to satisfy its obligations is known as "winding up" or "liquidation of a firm." After all debts, costs, and expenses have been paid off, any money left over is divided among the company's shareholders. The company is formally dissolved and ceases to exist once the winding-up is complete. Winding up entails appointing a liquidator to sell off the company's assets, distribute the revenues to the creditors, and submit a dissolution request to the NCLT law. Dissolution refers to entirely dissolving the business. Any additional operations cannot be carried out under the company name. A contributing has the right to file a petition to dissolve a company, even if he or she is the owner of fully paid-up shares or the firm has no assets at all or none left over to distribute to its stockholders after satisfying its debts. Choosing a liquidator to sell the company's assets, distribute the money to the creditors, and submit a dissolution request to the NCLT is known as winding up. Dissolution refers to the entire dissolution of the business. The company name cannot be used for any other transactions. A contributing has the right to file a petition to dissolve a company, even if he or she is the owner of fully paid-up shares or the company has no assets at all or none left over after paying its debts.
The difference between enameled wire and magnet wire?
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What do you mean by compulsory winding up of a company?
What do you understand by "compulsory" and "voluntary" winding up of a company
Benefits of winding up of a company?
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Winding up of a joint stock company?
it means to liquidation the company that we can do it by three methods winding up by court voluntary winding up and winding up subject to supervition of the court
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What is the different between bankruptcy and liquidation?
The main difference is laid in the cause of each situations. In bankruptcy, the major reason is that the company is unable to pay its debt at maturity so that the creditors petition for bankruptcy in order to recoup their debt. In liquidation or wind-up, it means that the company was brought to termination. The are many grounds for liquidation, such as the company unable to pay its debt (compulsory liquidation) or its member agree to terminate its activities ( voluntary liquidation).Please Note:There is also a difference between "Winding-up" and "Liquidation".Winding-up:It is a process / procedure by which assets of the company are realized and liabilities are settled. It may take several months. A liquidator is appointed to do all these activities. In essence, liquidator is the full in-charge of the company's affairs. The company still exists with its legal status as a company, but it cannot conduct its business (except required for beneficial winding-up of affairs).Liquidation / Dissolution:When all the assets of the company are completely realized and all liabilities are completely settled, and affair of the company are fully wound up, the company is liquidated. This is the end of the company's life. After liquidation, the company dies; it has no legal existence, no assets, no liabilities, no management, and nothing else. In pure legal terms, this is called "Dissolution"."Liquidation" is also used, alternatively, when a company becomes unable to pay its debts. Then, it is said that the company is liquidated.
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