What is the Company’s Liquidation?

Simply put, liquidation is the mechanism by which a business shuts down its activities. The company may decide to close down for a variety of reasons, including a refusal to continue operations, insolvency, and so on. The word “liquidation of a company” refers to the process of selling a company’s assets. The company may sell its assets to meet obligations if the liquidation process is started.

How do you dissolve a business?

A company’s winding-up entails ceasing all business activities, sales, and selling off all of the company’s properties to other persons or corporations in order to pay off its debts.

After the debts have been cleared off, the remaining assets of the company will be shared among shareholders concerning the capital invested by them

The company’s winding-up can be accomplished in two ways.

Compulsory winding up: A company’s compulsory winding up will be carried out under the order of a tribunal or a judge, bypassing a special resolution passed by the board of directors proposing a court intervention. Similarly, if the company has engaged in any fraudulent or illegal practises, it may be wound up compulsorily by filing a petition with a court or a tribunal by any official individual of the company.

Voluntary winding up: The corporation needs a resolution from the board of directors to sell all of the company’s assets or move the stakes to another party.