Modes of winding-up:

Part VII of the Act deals with the winding-up of a company. Under Section 425, a company may be winding-up either: (i) by a Court (compulsory winding-up) or (ii) voluntarily or (iii) subject to supervision of the Court. Whichever method is adopted, a liquidator or liquidators must be appointed to administer the property of the company, and they first apply the assets of the company towards the payment of debts which have statutory priority in a winding up, next to the payment of creditors in their order of precedence and then distribute the surplus, if any, among the shareholders according to their rights inter se.