Winding Up

What does 'Winding Up' mean

Winding up is the process of selling all the assets of a business, paying off creditors, distributing any remaining assets to the principals or parent company, and then dissolving the business. Winding up can refer to such a process either for a specific business line of a corporation or to the dissolution of a corporation itself.

Also known as liquidation.

BREAKING DOWN 'Winding Up'

The process of dissolving a corporation is much more involved than that of winding up one of its specific business lines, and generally only happens when it goes bankrupt. The negative impact to the local and regional economies of a corporation's wind up post-bankruptcy is likely to be more pronounced if the company is a large one. A large bankruptcy generally entails the layoffs of hundreds of employees, apart from having a detrimental impact on the finances and business of the company's suppliers and lenders.



A particular business line may occasionally be wound up by a company because of its diminishing prospects or minimal contribution to the parent company's bottom line. The parent company may decide to wind up such a business if efforts to find a buyer for it are unsuccessful. The winding up process in this case is likely to be more orderly, and have much less of a negative impact on the economy, than a corporate winding up.

RELATED TERMS
  1. Liquidator

    In the most general sense, a person or entity that liquidates ...
  2. Associate Company

    A corporation whose parent company possesses only a minority ...
  3. Core Assets

    An essential, important or valuable property of a business without ...
  4. Secondary Business

    A part of a corporation that is not part of the corporation's ...
  5. Spin Out

    A type of corporate restructuring. Spin outs occur when a corporation ...
  6. Liquidation

    Usually occurs when a company is insolvent, meaning it cannot ...
Related Articles
  1. Options & Futures

    Wind

    Windmill farms are sprouting up around the world
  2. Stock Analysis

    Watch These Top Wind Power Stocks, ETFs

    Wind power has already grown impressively and its best days are ahead. Here are some stocks and ETFs to consider.
  3. Personal Finance

    Wind Power Maintenance

    These jobs may seem like science fiction, but in the not-too-distant future these will be some of the most sought after careers.
  4. Stock Analysis

    Vestas Wind Systems: Time to Invest?

    Examine the history and recent performance of Vestas Wind Systems, and learn why the company's stock may be poised to surge higher in 2016.
  5. Professionals

    Dissolution

    Dissolution
  6. Personal Finance

    GE's New Direction Sees Early Successes

    General Electric's divestment of its financial services arm and its recommitment to industrial manufacturing has Wall Street excited for good reason.
  7. Entrepreneurship

    Alternatives To Business Bankruptcy

    Bankruptcy isn't the only alternative for a struggling business. It can try negotiating with creditors or liquidating assets outside the U.S courts.
  8. Entrepreneurship

    Ready to Retire? Here's How to Sell and Close Your Small Business

    Learn the essential steps to prepare to sell your business with the best possible outcome, a secure retirement for you and your family.
  9. Investing

    How Low Oil Prices Affect Alternative Fuels

    Cheaper oil may make renewable energy sources such as solar and wind power less attractive.
  10. Retirement

    Helping Aging Parents Manage Their Money

    Old age can make dealing with finances difficult. Find out how you can help aging parents manage their finances and estates.
RELATED FAQS
  1. What happens when a corporation declares bankruptcy?

    Understand what options are available to corporations under bankruptcy protection, and learn what takes place after bankruptcy ... Read Answer >>
  2. How is taxation treated for both the parent and subsidiary company during a spinoff?

    Learn how the potential tax implications of a spinoff can affect both parent and subsidiary companies and how taxes may be ... Read Answer >>
  3. What are the main substitutes for oil and gas energy?

    Read about some of the major substitute sources of energy that compete with fossil fuels -- oil, natural gas and coal -- ... Read Answer >>
  4. In what context is a corporation considered to be an individual entity?

    Read about when a corporation is considered an individual entity, when it is not and why corporations are not considered ... Read Answer >>
  5. What happens to the shares of a company that has been liquidated?

    Learn what happens to a company's shares during Chapter 11 and Chapter 7 bankruptcy proceedings, and understand how much ... Read Answer >>
  6. Where can I find a company's stance on the environment?

    A company's stance on the environment is typically found in the company's statement on corporate sustainability. These statements ... Read Answer >>
Hot Definitions
  1. Law Of Demand

    A microeconomic law that states that, all other factors being equal, as the price of a good or service increases, consumer ...
  2. Cost Of Debt

    The effective rate that a company pays on its current debt. This can be measured in either before- or after-tax returns; ...
  3. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  4. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  5. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  6. Society for Worldwide Interbank Financial Telecommunications ...

    A member-owned cooperative that provides safe and secure financial transactions for its members. Established in 1973, the ...
Trading Center