Winding up (Also known as liquidation, Ro.: lichidare, Fr.: liquidation, n.f., Gr.:  εκκαθάριση, Cz.: likvidace společnosti) (See also: bankruptcy, dissolution, insolvency, Phoenix companies) = the process by which a company is selling all its assets and property, in order to pay off unsecured creditors, distributing any remaining assets among the shareholders in proportion to their shareholdings, and then dissolving the company.

Compulsory ~ (Ro.: lichidare obligatorie, Fr.: liquidation forcée, n.f.) = a liquidation procedure ordered by the court and issued at the request of the company’s creditors, who generally have the right to choose and appoint the liquidator.

Voluntary ~ (Ro.: lichidare voluntară, Fr.: liquidation volontaire, n.f.) = a liquidation procedure initiated by the management of a company or by its creditors.


Useful links

Legislation - Insolvency Act 1986, UK [English] - Insolvency Rules 1986, UK [English] - 11 U.S. Code Chapter 7 – LIQUIDATION, USA [English] - Law 85/2014, Section 7, Bankruptcy and winding-up of assets, Romania [Romanian] – Law 278/2014 for the approval of Government Ordinance No. 10/2004 on the judicial reorganisation and winding-up proceedings of credit institutions, Romania [English] - European Parliament and Council Directive 2001/24/EC on the reorganisation and winding-up of credit institutions [English] – Companies Act, Chapter 50, Section 410, Companies (Winding Up) Rules, Singapore [English] - Regulations for the Winding-Up and Judicial Management of Companies, South Africa [English]

Case Law

Ebrahimi v Westbourne Galleries Ltd [1973] AC 360 – on the just and equitable winding up - Bank Handlowy w Warszawie SA and PPHU «ADAX»/ Ryszard Adamiak v. Christianapol sp. z o.o.

Organisations and associations - Companies House, Liquidation and Insolvency (UK) - Practical Law, Compulsory liquidation: a quick guide (UK) -, Winding-up information for every EU country

Online Publications – Mokal, Riz, 2007, What Liquidation Does for Secured Creditors, and What it Does for You, Social Science Research Network – Klausner, Michael, 2013, Liquidation Rights and Incentive Misalignment in Start-Up Financing, Social Science Research Network - Hashi, Iraj, 1995, The Economics of Bankruptcy, Reorganisation and Liquidation: Lessons for East European Transitional Economies, Center for Social & Economic Research


Goode, Roy, Goode, Royston Miles, 2011, Principles of Corporate Insolvency Law, UK, Sweet & Maxwell

Reports of bankruptcy and companies winding-up cases decided in the High Court of Justice, the Court of Appeal, and the House of Lords, Volume 20, UK, Sweet and Maxwell

Tomasic, Roman, Bottomley, Stephen, McQueen, Rob, 2002, Corporations Law in Australia, 2nd edition, NSW, Federation Press

Wood, Philip R., 2007, Conflict of Laws and International Finance, Volume 6, UK, Sweet & Maxwell


By Radu Șomlea