Winding up a private limited company is a procedure of dissolving or shutting down the business. This includes settling all liabilities, allocating assets, and eliminating the company from the legal registry, ensuring that it stops operations and legally winds up.

The voluntary winding up of a company is the process by which the company 'resolves' through either the shareholders or the directors to dissolve. It is usually done in cases where the company is solvent and in a position to pay its debts or when the company is no longer viable or needed.

Mandatory winding-up denotes the binding liquidation of assets and dissolution of a firm, generally by order of a court, for legal reasons such as insolvency, inability to pay debts, or failure to observe statutory requirements. A proceeding which ensures that the firm is properly wound up, with assets distributed to creditors in order of legal priority.