IVA Glossary
W
Winding Up
Also known as liquidation, "winding up" refers to the procedure which puts an end to a company, and all of the company's assets are redistributed. This redistribution implies that all of the company's assets are registered and after they are divided to meet the company's liabilities, the surplus is distributed among the members. Nevertheless, such a surplus is not always guaranteed to exist. Winding up procedures are also used in relation to partnerships.
In any case, winding up implies a process of dissolving either a partnership or corporation by collecting all of its assets and outstanding income, and satisfying the claims of its creditors. Whatever remain (the net assets) are also distributed. The first entities in this distribution are the so-called preferred stockholders, and the remaining shareholders come only after the preferential ones. The claims of those shareholders who are not preferential will be satisfied in a pro rata basis. Winding up is said to be the prevision of a company's dissolution, the latter denoting the last phase of liquidation.
The winding up procedure might be compulsory, and this type is also known as the creditors' winding up or liquidation. Winding up can also be voluntary, and this type is also called "the shareholders' liquidation". Nevertheless, some voluntary winding up procedures are regulated and conducted by the creditors.
It should be noted that winding up procedures also exist when a country's authority is responsible for collecting customs duties, determining the final calculation or insurance of the duties.
In any case, winding up implies a process of dissolving either a partnership or corporation by collecting all of its assets and outstanding income, and satisfying the claims of its creditors. Whatever remain (the net assets) are also distributed. The first entities in this distribution are the so-called preferred stockholders, and the remaining shareholders come only after the preferential ones. The claims of those shareholders who are not preferential will be satisfied in a pro rata basis. Winding up is said to be the prevision of a company's dissolution, the latter denoting the last phase of liquidation.
The winding up procedure might be compulsory, and this type is also known as the creditors' winding up or liquidation. Winding up can also be voluntary, and this type is also called "the shareholders' liquidation". Nevertheless, some voluntary winding up procedures are regulated and conducted by the creditors.
It should be noted that winding up procedures also exist when a country's authority is responsible for collecting customs duties, determining the final calculation or insurance of the duties.
