Investopedia

Continue to Site »

Winding Up

Filed Under » ,
Dictionary Says

Definition of 'Winding Up'

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.
Investopedia Says

Investopedia explains '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.

Articles Of Interest

  1.

    Liquidation Blues: When Mutual Funds Close

    Underperforming funds often close their doors, leaving investors down and out.

  2. How To Calculate A Z-Score

    Investors need to know how to detect signs of looming bankruptcy. The Z-score can help.

  3. Distressed Debt An Avenue To Profit In Corporate Bankruptcy

    Use debt securities to attack bankrupt companies and scavenge them for profits.

  4. An Overview Of Corporate Bankruptcy

    If a company files for bankruptcy, stockholders have the most to lose. Find out why.

  5. Bank Failure: Will Your Assets Be Protected?

    The SIPC and FDIC insure against personal financial ruin when banks or brokerages go belly up.

  6. Liquidity And Toxicity: Will TARP Fix The Financial System?

    TARP is the government's attempt to forestall a deep, extended recession. Will it work?

  7. GE's Guidance Wasn't Great, But Expectations Seem Low

    GE looks underpriced on its long-term growth potential.

  8. Dover May Be Bottoming, But The Street's Already Thinking Recovery

    Dover management is continuing to make the case that results will improve in the second half of 2013. Remember that while the news (and anticipation) cycle has already moved on to the future, ...

  9. Bankruptcy

    Learn what happens when an individual or an organization files for bankruptcy.

  10. 6 Decisions That Cost Companies Millions

    Here are some of the worst business decisions of all time, made across a broad range of sectors and industries.
comments powered by Disqus
Marketplace
Hot Definitions

  1. Disaster Loss

    A special type of tax-deductible loss, similar to a casualty loss, where a loss has been incurred by taxpayers who reside in an area that has been designated as a federal disaster area by the President.

  2. Fool In The Shower

    The notion that changes or policies designed to alter the course of the economy should be done slowly, rather than all at once.

  3. Pattern Day Trader

    An SEC designation for traders who trade the same security four or more times per day (buys and sells) over a five-day period, and for whom same-day trades make up at least 6% of their activity for that period.

  4. Cost-Push Inflation

    A phenomenon in which the general price levels rise (inflation) due to increases in the cost of wages and raw materials.

  5. Happiness Economics

    The formal academic study of the relationship between individual satisfaction and economic issues, such as employment and wealth.

  6. Affluenza

    A social condition arising from the desire to be more wealthy, successful or to "keep up with the Joneses." Affluenza is symptomatic of a culture that holds up financial success as one of the highest achievements.
Trading Center
Array ( )