It is often said that failure is an essential step of learning. Business failure is an inherent process of economic activity so much so that it is estimated that some 200,000 firms in the European Union go bankrupt annually in the European Union. Around half of new operations fail to get through the first five years, and bankruptcies usually account for 15% of such failures.

In terms of the Companies Act, a company may be dissolved in one of two manners: either on a voluntary basis, which may take place either by way of a members’ winding up or a creditors’ winding up, or, by Court order.