Compulsory Winding Up

Compulsory winding up is a legal process where a company is forced to close down and sell its assets to pay off debts. This usually happens when creditors, who are owed money, file a winding-up petition in court. If the court agrees, an official liquidator is appointed to oversee the process, ensuring the company’s debts are settled as fairly as possible with available funds. This process aims to protect the rights of creditors and provide an orderly way to wind up the company’s affairs.