Biztalk-Corporate Recovery Series #5 What is a Court Liquidation or Court Winding-Up?

Court Winding-Up

Court Winding-Up (Compulsory Winding-Up) is common when a company is not able to pay its debts.

It usually starts with a Notice of Demand served on the company by the creditor demanding the company to settle its outstanding debt

Application will be made to court (winding-up petition) if the company fails to settle the debts as per Notice of Demand.

If winding-up order is granted, a Liquidator will be appointed to administer the winding-up of the company.

The following are, amongst others, the grounds for Court Winding Up:

[1] Disputes, breakdown of trust amongst shareholders which cannot be resolved amicably

[2] Directors committing fraud or carrying out the business in the manner unfair, unjust and/or not in accordance to members’ interest

[3] Company is being used for unlawful business activities

[4] Company not able to continue business due to its license being revoked by the relevant authorities

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