Consequences of winding up a company

The first and the very obvious result of a winding up company is that all the company’s operations stop and nit does not trade any more. All the company bank accounts and those of the directors too are frozen until the matter has been resolved or until the court has decided what to do with the directors. In most cases the directors took responsible for what befalls the company and are indeed liable for what becomes of the company. They are personally held responsible for the debts incurred during their tenure.

After a winding up petition is granted, employees will most likely start losing their jobs especially if the company is going to be closed. The directors on the other hand will be suspended from directorship either for good or until they have been cleared. However for most of them, this suspension is their walking order. The company stops trading and its assets are frozen after the winding up order and at that juncture, no company asset can be or leased, sold or transferred unless with the court order