Liquidation is a legal process by which a company’s assets are sold off to pay its creditors, and the company is then dissolved. The process typically involves the following steps:
Appointment of a licensed insolvency practitioner to oversee the liquidation process
Identification and valuation of assets, including tangible assets such as property, equipment and stock, as well as intangible assets such as intellectual property.
Once the assets have been identified and valued, the liquidator will sell them off to raise funds to pay the company’s creditors.
The funds raised from the sale of the assets are then used to pay the company’s creditors in a strict legal order of priority.
Once all the company’s debts have been paid, any remaining funds are distributed to the shareholders in proportion to their shareholdings.
Dissolution of the company: Once the liquidation process is complete, the company is dissolved and ceases to exist.