likvidaatiota

Liquidation refers to the process of winding up a company or other entity. It involves selling off all the assets of the business to pay off its debts and liabilities. Any remaining funds are then distributed to the owners or shareholders. This process can be voluntary, initiated by the company's owners, or involuntary, often forced by creditors or the courts.

There are several types of liquidation. A members' voluntary liquidation occurs when a solvent company decides to cease trading and distribute its assets to its shareholders. This is typically done for strategic reasons, such as retirement or restructuring. A creditors' voluntary liquidation, on the other hand, happens when a company is insolvent, meaning it cannot pay its debts. In this scenario, the directors propose the liquidation, and creditors have a significant say in the process.

Compulsory liquidation, also known as winding up by the court, is initiated by a petition to the court. This can be brought by the company itself, its directors, shareholders, or creditors. The court will appoint an insolvency practitioner to oversee the liquidation, sell the assets, and distribute funds to creditors. The primary goal of liquidation is to bring an orderly end to the entity's existence and settle its financial obligations as fairly as possible.