Practical Law ANZ Glossary w-006-4196 (Approx. 4 pages)
Glossary
Winding up
A type of external administration (also referred to as liquidation) in which a liquidator is appointed to a company to take control of the company and its property, and wind up its affairs in an orderly way for the benefit of creditors.
A liquidator is most commonly appointed in one of the following circumstances:
Voluntarily by the company itself, where it is either:
solvent (by a members' voluntary winding up (MVL)); or
insolvent (by a creditors' voluntary winding up (CVL)).
By court order on the application of a creditor after non-compliance with a statutory demand (a compulsory winding up).
At the end of a period of voluntary administration where the continuation of the company is not financially viable and creditors have resolved that the company be wound up or where a deed of company arrangement (DOCA) has been terminated.
In an insolvent winding up, the liquidator's role is to:
Wind down the company's business.
Recover, secure and realise the company's assets (if any).
Investigate the circumstances that preceded the liquidation, including the conduct of the company's directors and officers.
Distribute the assets (proceeds of sale) amongst creditors and deregister the company.