What happens when a company is wound up
Liquidation of a company
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In South African Law, a company can be liquidated (wound up) either voluntarily (by members of the company or its creditors) or by the court at the instance of an interested party (such as the company itself, its members or a creditor) if the court is satisfied that the company is unable to pay its debts or that it is just and equitable that the company should be wound up.
When a winding-up order has been made, a liquidator is appointed to assess particulars of the company’s assets, debts and liabilities and to distribute the net proceeds to creditors according to a laid-down order of preference (awarding firstly to preferent, then secured and lastly to concurrent creditors).