What is winding up company?

Winding up company is that act of compulsory closure of a business after it has been unable to meet its obligations. What happens here is that the creditor goes to court and applies for a winding up petition. This is usually done to force the debtor to pay and it has worked quite a number of times. A creditor as an individual, a group of creditors or a creditor company can go to court in order to seek to recover its money from a debtor company.

Usually the debtor is given seven working days in which to take measures after getting a winding up order from the court. On the other hand a debtor will have to prove to the court that he/she has tried other means of recovering their debt from the business before resorting to the court. Winding up will take place against the wishes of the directors but again it comes with the turf.