Dissolution of a company is when a company is dissolved by order of a tribunal, i.E. National company law tribunal (NCLT), after the completion of its winding-up process.
The company’s dissolution brings its existence to an end, and its name is struck off by the registrar of companies (ROC).
2. Dissolution of a company is when a company is dissolved by order of a tribunal, i.E. National company law
tribunal (NCLT), after the completion of its winding-up process.
The company’s dissolution brings its existence to an end, and its name is struck off by the registrar of
companies (ROC).
Both dissolution and winding up relate to the company’s end and are sometimes confused by the
people.
Winding up is the process where the liquidator is appointed to settle and distribute the company’s
assets among the creditors and other relevant stakeholders. Dissolution takes place after the
winding process is completed.
3. Dissolution of a Company
A company ceases to exist as a corporate entity after its
dissolution. The company name is struck off from the register of
companies, and it shall be published in the official gazette.
Dissolution of a company can be brought about in the following
two ways:
Through transferring the company’s undertaking to another
company under a scheme of amalgamation or reconstruction. The
order of NCLT will dissolve the transferor company without being
wound up.
Through winding up of the company by realising its assets and
paying its liabilities from the proceeds
4. Winding up of a Company
The winding up procedure results in the dissolution of a
company. A liquidator is appointed who takes control of the
company.
The liquidator realises the company assets and applies the
proceeds in payment of its debts.
In between winding up and dissolution, the company
exists, and it can be sued in a court of law or nclt. After
completing the winding up process, the liquidator applies
to the NCLT to pass an order of dissolution.
5. Dissolution and Winding up Differences
Particulars Winding up Dissolution
Meaning
Winding up means
appointing a liquidator to sell
off the assets, divide the
proceeds among creditors,
and file to the NCLT for
dissolution.
Dissolution means to
dissolve the company
completely. Any further
operations cannot be done in
the company name.
Process
Winding up is one of
the method through which
the dissolution of a
company is carried on.
Dissolution is the end
process/result of winding up
and getting the name stuck
off from the Register of
Companies.
Existence of Company
The legal entity of the
company continues and
exists at
The dissolution of the
company brings an end to its
6. Dissolution and Winding up Differences
Continuation of
Business
A company can be
allowed to continue its
business during the
winding up process if it is
required for the
beneficial winding up of
the company.
The company ceases to
exist
upon its dissolution.
Moderator
Liquidator carries out the
process of winding up.
The NCLT passes the order
of dissolution.
Activities Included
Filling of winding up
resolution or petition, the
appointment of the liquidator,
receiving declarations,
preparation of reports,
disclosures to ROC and filing
for dissolution to the NCLT.
Filing of resolutions,
declarations and other
required documents to the
NCLT to pass dissolution
order.
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