Understanding the Liquidation Process in Business
The liquidation process refers to the systematic and organised winding down of a business or company's operations to settle its financial obligations. It typically occurs when a company faces insurmountable financial difficulties, and its assets are sold to repay creditors and shareholders. This process involves assessing the company's assets, valuing them, and then selling them off. The proceeds are distributed in a predetermined order of priority, with secured creditors typically receiving payment first, followed by unsecured creditors and shareholders. The ultimate goal of the liquidation process is to ensure an equitable distribution of available assets to all stakeholders and the legal dissolution of the company.
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