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Liquidation/Insolvency

It is an event that usually occurs when a company is insolvent

Liquidation is the process of bringing a business to an end and distributing its assets to claimants. It is an event that usually occurs when a company is insolvent, meaning it cannot pay its obligations when they are due. Insolvency essentially means that a business reaches a point where it is not able to make necessary payments when they are due. Choosing liquidation converts the business assets to cash, which is then used to make these payments. In such cases companies are not any more functional or there is simply a mutual agreement that it should be the end of a certain business. If organization is in a situation like this, it can be expected that it’s going to be a dissolved company in the near future. There are a couple of other names that liquidation is known for, such as winding-up or dissolution (which is the final step of the process) or deregistration.


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