What does liquidation mean in business?

Definition: Liquidation is the process of selling off assets to repay creditors and distributing the remaining assets to the owners. In other words, liquidation is the process of closing a business, paying off creditors, and giving the investors whatever is left over. What Does Liquidation Mean?

Is LIQUIDATION COMPULSORY or voluntary?

Liquidation may either be compulsory or voluntary. The term liquidation is also used to describe that a company seeking it is ready to divest some of its assets. For instance, a retail chain may wish to close some of its stores.

What is a claim settlement in a liquidation process?

The primary sequence of claim settlement in the liquidation process is as follows: Secured: First, the company settles its preferential creditors such as employees and landlord; reimburses all secured creditors like the bank that provided mortgage loan; and pays the insolvency practitioner hired for liquidation.

What is liquidation in Shopify?

Definition and Guide (2023) Liquidation generally refers to the process of selling off a company’s inventory, typically at a big discount, to generate cash. Email address Create your store Build your dream business for $1/month Start your free trial, then enjoy 3 months of Shopify for $1/month when you sign up for a monthly Basic or Starter plan.