This document discusses the dissolution and winding up of companies. Dissolution is the final stage of liquidation where a company's assets and property are redistributed. Companies may be dissolved for reasons like expiration of term, shareholder resolution, merger/division, or license revocation. Winding up is the process where a company's existence ends, assets are collected and used to pay debts, and any remaining balance is distributed. There are two modes of winding up - voluntary and by court. Voluntary winding up can be members' or creditors' based on solvency. Winding up by court is compulsory and begins with a petition to the court.

1. Dissolution of
companies

2. Topic: Dissolution of Companies

3. Introduction
• Dissolution is the last stage of liquidation, the
process by which a company (or part of a company)
is brought to an end, and the assets and property of
the company redistributed.
• Dissolution may also refer to the termination of a
contract or other legal relationship; for example, the
dissolution of a marriage, or divorce.

4. Companies may be dissolved for any
one of the following reasons:
• The term of operation prescribed by the company's
articles of association has expired, or any other cause for
dissolution prescribed by the company's articles of
association has occurred.
• The shareholders meeting or the general meeting of
shareholders has adopted a resolution for dissolution.
• Dissolution is required due to merger or division of the
company.

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• The business license of the company is revoked by
law, or the company is ordered to terminate or
cancelled.
• The company is dissolved by the people’s court in
accordance with the provisions of Article 183.

6. Winding Up of Companies
• Winding up is a process in which the existence of a
company is brought to an end, where assets of a company
are collected and realized.
• The proceeds collected are used to discharge the
company’s debts and liabilities and the remaining balance
(if any) will be is distributed amongst the contributories
according to their entitlement.

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There are 2 modes of winding up:
• Voluntary winding up
• Winding up by Court

8. Voluntary winding up
• Members’ voluntary winding up is the liquidation of
a solvent company where the directors have formed
an opinion that the company will be able to pay its
debts in full within the period of 12 months after the
commencement of winding up as stated under
section 257 of the CA 1965.

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• Creditors’ voluntary winding up is a liquidation of an
insolvent company where the directors make a
declaration stating that the company cannot, by
reason of its debts and liabilities, continue its
business. A meeting between the company and its
creditors must be summoned within 1 month from
the date of the declaration.

10. Company winding up by Court
• Winding up by Court is also known as a compulsory
winding up. It begins with the presentation of a
petition in Court. The petitioners include creditors,
liquidator, the Registrar of companies or the Official
Receiver under section 217(1) of Companies Act
1965.

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