Liquidation
Liquidation is the process of closing down a business that can no longer pay its debts. In this process, the company's assets are sold off to generate cash. This money is then used to pay creditors, starting with those owed the most. Liquidation can be voluntary, initiated by the business owners, or involuntary, initiated by creditors through court proceedings. Once the assets are sold and debts settled as much as possible, the company is formally dissolved and ceases to exist. The goal is to fairly distribute the remaining assets to those owed money.
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Liquidation refers to the process of converting a company's assets into cash, typically when it is unable to meet its financial obligations. This can occur voluntarily, where the business decides to close and settle its debts, or involuntarily, usually through bankruptcy proceedings. During liquidation, the company's assets, such as inventory, equipment, or property, are sold off, and the proceeds are used to pay creditors. Any remaining debts that cannot be settled may result in the company being dissolved, effectively ending its operations.