Are 'winding-up' and 'dissolution' synonymous? Discuss.

The terms "Winding up" and "Dissolution" are sometimes erroneously used to mean the same thing. The legal implications of these two terms are quite different and there are fundamental differences between them as regards the legal procedure involved. The entire procedure for bringing about a lawful end to the life of a company is divided into two stages - 'winding up' and 'dissolution'. Winding up is the first stage in the process whereby assets are realised, liabilities are paid off and the surplus, if any, distributed among its members. Dissolution is the final stage whereby the existence of the company is withdrawn by the law. The liquidator appointed by the company or the Court carries out the winding up proceedings but the order for dissolution can be passed by the Court only. According to the Companies Act the liquidator can represent the company in the process of winding up. This can be done till the order of dissolution is passed by the Court. Once the Court passes dissolution orders the liquidator can no longer represent the company. Creditors can prove their debts in the winding up but not on the dissolution of the company. Winding up in all cases does not culminate in dissolution. Even after paying all the creditors there may still be a surplus; company may earn profits during the course of beneficial winding up; Dissolution is an act which puts an end to the life of the company.