IS WINDING-UP AND DISSOLUTION ARE SYNONYMOUS

In general we think winding-up and dissolution are synonymous but from the legal perspective winding-up and dissolution are not same. From the legal perspective winding-up and dissolution have following differences which are stated below.

1.       A registered company is an artificial judicial person. Its life also brings to an end by the application of law. To end the life of a registered company a systematic legal procedure should have been followed. The legal procedure can be divided into two stages. Primary stage is known as winding-up and second and final stage is known as dissolution. Winding-up process includes the following activities such as assets are realized, liabilities are paid-up and surplus is distributed. At the time of dissolution legal status of a company comes to an end.

2.       During the winding-up liquidator is appointed by the company or court whereas the order of dissolution always passed y the court.

3.       Liquidator represents the company till the order of dissolution passed by the court. Once the dissolution oder has been passed by the court liquidator can no longer represent the company.

4.       Creditors can prove their debts in the winding-up but not on the dissolution of the company.

5.       Winding-up does not mean a company always comes to an end sometimes a company has some possibility of recovery but whenever dissolution order have passed the company comes to an end.