Companies may experience problems such as insolvency and they may be subjected to winding up or judicial management.

Winding up is concerned with the dissolution of the company and the extinction of the legal personality. Judicial management on the other hand is a legal process of handling or conducting company affairs which are about to go into liquidation .judicial management is intended to save the company from collapse. It is therefore an alternative remedy to winding to winding up and it does not mean that before a company to wound it must be placed under judicial management. WINDING UP There are two types of winding which are compulsory winding up and voluntary winding up. Compulsory winding up is commenced when petition for a winding up order is presented to the court by the company, the creditors or minister. The possible grounds for the petition are: 1) 2) 3) 4) 5) Default in lodging statutory report or holding statutory meeting (s) Section 124. Failure to commence business in a year. When a company is member less. Loss of 75% paid up share capital. Failure to pay debts according to section 205 and is the most common ground for winding up. 6) Just and equitable ground and is divided into the following categories: -loss of companys substratum when a company has abandoned its main object or is unable to achieve them. -As was held in the case of RE SERMAN DATE COFFEE COMPANY where a companys main object was to acquire a plant for manufacturing dates as a substitute for coffee but did not and it was held that the company should have been wound up. Deadlock or stalemate ,this may occur where a company is unable to take management decisions on account of equal voting strength of two opposing groups of shareholders. The court applied the principles partnership and ordered a winding up in the case of RE YENDJE TOBACCO CO. LTD (1916). -Minority oppression -Lack of probity. This is where there is no transparency. There is dishonesty or misconduct in the case of WOOLMARK V COMMERCIAL VEHICLE SPARES. Winding up was granted by the court.

VOLUNTARY WINDING UP This is when a company simply passes a special resolution to the effect that the company could be wound up voluntary. Grounds for winding up 1) Where the period if any fixed for the duration of the company by the articles expires the event ,if any occurs on the occurrence of which the articles provide that the company is to be wound up voluntarily. 2) If the company resolves by special resolution that the company be wound voluntarily.

JUDICIAL MANGEMENT In terms of section 300 of the Zimbabwe companies act, the court may grant a judicial management order when by reason of management or for any other cause a company is unable to meet its obligations but it has not become or is prevented from becoming a successful concern and there is reasonable probability that if it is placed under judicial management it will recover. The reason behind judicial management is to provide the company with efficient management to necessitate sound economic recovery. Judicial management is only granted in circumstances where a winding up order many cause unnecessary prejudice to the shareholders and creditors of the compay.