Compulsory winding up is initiated by a court order, usually upon the application of creditors, the company itself, shareholders, or other parties like a liquidator. The process includes:
Filing a Winding Up Application: The application is made to the court, usually by creditors.
Court Hearing and Order: The court hears the case and, if satisfied that the company should be wound up, issues a winding-up order.
Appointment of Official Liquidator: The court appoints an official liquidator to oversee the winding-up process.
Liquidation Process: The liquidator takes control of the company, terminates its operations, liquidates its assets, pays off its debts, and distributes any surplus among shareholders.
Final Reporting and Dissolution: The liquidator reports to the court and ACRA upon completion of the liquidation process, leading to the company’s formal dissolution.
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