Winding up and dissolution are both steps in the closing of a business. Winding up comes before dissolution. Winding up refers to closing the operations of a business, selling off assets, paying off creditors, and distributing any remaining assets to the owners. Once the winding-up process is complete, the dissolution step comes into play. This is when the company formally under law ceases to exist. Documentation is prepared to officially end the business as a legal entity.