WHAT IS LIQUIDATION?

1.   Liquidation typically occurs when a company has reached a point where, for one reason or another, it has been decided that the business cannot continue.

2. In such a case it can be considered liquidating the company. This basically means turning your assets into cash, subject to applicable legislation.

3. Turning assets into cash is generally done to pay off a variety of debts, depending on investments made into the business by creditors, or loans taken in growing the business.

4. Liquidating leads to the dissolution of the company and brings all activity to a close.

5. It is a means for an insolvent business to cover any remaining debts at least to some extent.

6. Solvent companies can also be liquidated.

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