Winding Up According to Prof Gower “Windingup of a company is a process by whereby its life is ended and its property administered for the benefit of its creditors and members”. Anadministrator, called Liquidator is appointed and the takes control of the company, collects its assets, pays its debts and finally distributes any surplus among the members in accordance with their rights.
Modes of Winding Up Windingup by Court i.e., Compulsory Winding Up Voluntary Winding Up Winding up subject to Supervision of Court
Grounds of CompulsoryWinding Up Special Resolution By Court Default in Delivering the Statutory Report to the Registrar or in holding Statutory meeting. Failure to commence, or suspension of, Business Reduction in Membership
Grounds of CompulsoryWinding Up Inability to pay its debts When a company is unable to pay its debts Demand for payment neglected Decreed debt unsatisfied Commercial insolvency
Grounds of CompulsoryWinding Up Just and Equitable Clause When the substratum of a company is gone When the management is carried on in such a way that the minority is disregarded or oppressed When there is deadlock in the management of the company Ex: Yenidje Tobacco Co Ltd Where Public interest is likely to be prejudiced. When business of company become illegal When the company is a mere bubble and does not carry on any business or does not have any property.