Winding Up Legal Meaning and Definition

Here is a simplified definition of the legal term Winding Up.

Winding Up (verb):

"Winding up" is when you stop all the normal activities of a company or group of people. You look at all the things the company owns (assets) and owes (liabilities). Then, you give out these things to the people who own shares in the company. This is based on the agreement that was already made. When a company is winding up, it is not continuing its business any more. The owners get to have a part of what is left after everything is paid off. But, if there's not enough money to pay everything off, the agreement might say that the owners have to pay some money.