Liquidation

Liquidation or winding-up is the process in law by which a company is brought to an end and its assets and property distributed to claimants. When a company has been liquidated, it is sometimes said to be wound-up or dissolved, although dissolution technically refers only to the final stage of liquidation. Liquidation may be either compulsory, ordered by a court (sometimes called a creditors' liquidation or, in Australia, a wind-up order), or voluntary, begun by the company's members (a members' or shareholders' liquidation), though some voluntary liquidations are controlled by the creditors. The term "liquidation" is also used informally for a company divesting some of its assets. A retail chain wishing to close some stores, for instance, may sell them at a discount to a firm specialising in real estate liquidation rather than handle the disposals itself. A company may likewise sell assets in an orderly way outside a formal insolvency, for example to avoid having its portfolio written down in a compulsory liquidation. In customs law, the term liquidation has a separate meaning: the final computation or ascertainment of the duties or drawback accruing on an imported entry.