Winding Up by the Court

Winding up by the court is a legal process where a company is dissolved or liquidated due to financial difficulties or other serious issues. A court may order this when there’s a substantial inability to pay debts or if it's justly necessary, like when the company’s activities are detrimental to stakeholders. During this process, an official liquidator is appointed to sell the company's assets, settle debts, and distribute any remaining funds to shareholders. The aim is to ensure an orderly closure of the company while protecting the rights of creditors and other affected parties.