Winding up is the process, where all the assets of the business are sold to paying off creditors and distributing surplus if any, among the owners of the business. An LLP may decide to wind up its business by two modes, either by voluntarily winding up or compulsory winding up.
In voluntary winding up partners may decide between themselves to wind up the operations of the business.
In compulsory winding up an LLP may be compulsorily wound up by the order of the tribunal. There are certain circumstances for the LLP compulsory winding up. Eg. when LLP is unable to pay off its debts, where the number of partners of the limited liability partnership is reduced below two and it continues for the period of more than six months.
If your business in the private limited company is not running properly or faces continuous losses, it is better to close such private limited company and look for a new beginning.
A private limited company needs to be closed or windup when there are no exchanges or the Directors of company are not willing to proceed its operations. A private limited company generally can be shut by both voluntary and compulsory circumstances.