2 min read
Definition
Liquidation is the process by which a liquidator realises a company’s assets, distributes the proceeds to creditors under the statutory order of priority, and dissolves the company. It may be voluntary (creditors’ or members’) or compulsory by court order.
In plain terms
Unlike administration, liquidation ends the company. It is used when rescue is not viable and the remaining job is to distribute what is left fairly.
Why it matters for your company
Because it is terminal, liquidation is a last resort. Explore CVAs, administration or restructuring first. See solvency.
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