Written by Hillary Millman. Find the latest information on insolvency as well as insolvency advice
Liquidation is term that is used to describe a process that is used to raise capital by means of selling off a companies assets. These assets can be tangible properties such as tools and equipment or can even be less tangible properties such as patents or any other paper assets.
When a company is going through liquidation it does not necessarily mean that they are going out of business. A company can go through liquidation to pay off creditors so they can chart a new course or strategy which is many times the case. The truth of the matter however; is that the majority of liquidation cases involve a company that is in fiancial trouble.
There are three types of liquidation processes that are employed when a company is insolvent and they are “members Voluntary”, “creditors voluntary” and compulsory liquidation. With members vouluntary, the company partners or shareholders have agreed to the liquidation process and the value of the assets that the company has exceeds the amount of the money that is owed to its creditors.
With creditors voluntary liquidation, the partners or shareholders have all agreed to liquidate but the value of the companies assets is less than the amount of the money that is owed to its creditors. With compulsory liquidation, a court has ordered the company to liquidate its assets to pay off its creditors. After it has been decided to liquidate a companies assets, the first thing that is done is all business transactions are halted.
Then the controls of the company are handed over to a receiver, or group of receivers whose job it is to notify all share holders and creditors that the company is going through liquidation. Then the receivers begin the process of taking inventory of the companies assets and deciding how to convert them to liquid capital.
- Related Articles
- Related Q&A
Microbiology Analysis of Drinking Water
By: Fereshteh Safarzadeh Markhali | 01/12/2009Drinking water supplies are prone to contamination with sewage or other excreted matter may cause outbreaks of intestinal infections such as typhoid fever.
Three Most Under-Used Laser Procedures – Warts, Skin Stains and Scars
By: Andrew Wood | 01/12/2009Laser procedures are gaining popularity with unprecedented momentum. Laser hair removal is among the fastest growing male cosmetic procedures, and is quickly eating into over $130 million that Australians spend on home depilation products every year. However, many people (customers and clinic owners included) don’t realize the breadth of applications that a single medical laser machine has.
Process Analytical Technology – Application of Near IR Spectroscopy in Pharmaceutical Processes
By: poongothai | 01/12/2009Drug product manufacturing in pharmaceutical industries is generally controlled by testing products resulting from a process - finished product testing. Another innovative approach is process analytical technology (PAT) analytical testing is performed during the process. Process understanding is the basis for this innovative process control system.
What is the GHS Classification and Labeling regulation?
By: Editor123 | 01/12/2009GHS (Globally Harmonized System) has been developed in order to protect human health and the environment by providing an internationally comprehensive system for hazard communication.
The Process of Metal Working
By: Ryan Fyfe | 01/12/2009Metalworking is the process of working with metals to create a diverse range of products, from the hulls of ships to engagement rings. There are many reasons to practice metalworking. Metalworking can be used for experimentation, to create works ..
How to Perform Bacteria Identification Using Gas Chromatography of Fatty Acid Methyl Ester?
By: Fabio Pacheco | 30/11/2009As stated in my previous article “The Importance of Bacteria Identification in Clean Rooms”, we are supposed to identify the flora obtained from environment samples, and it is not limited to clean room environments. In this article, I am going to focus on bacteria identification solely.
Antioxidants are H1N1 Influenza’s Achilles Heel
By: Fabio Pacheco | 30/11/2009A recent article featured in FASEB Journal shows that antioxidants, largely found in plant-based foods, might be H1N1 influenza’s Achilles heel, preventing H1N1 virus to invade and colonize our lungs. In addition, the research conducted by Sadis Matalon and colleagues shows that antioxidants can help in the treatment of H1N1 influenza.
Goodwill Moon Rock: Where is Arkansas’s 5 Million Dollar treasure?
By: Atesha | 30/11/2009Where is Arkansas's Apollo 17 Goodwill Moon rock which was given to nation in 1973 and 1974.
Some Facts on Debt Consolidation
By: hillarymillman | 27/10/2007 | FinanceManaging your personal finances and maintaining a good credit rating is getting to be a more difficult thing to do in this day and age. The recent slump in the U.S. economy has made things even more difficult for many people now. Debt consolidation is one answer to many peoples financial troubles and there are a few good reasons why.
Some Thoughts on Bankruptcy
By: hillarymillman | 27/10/2007 | FinanceIf you have found yourself overburdened by debt and your income at the present time is not enough to cover your bills than you may want to consider bankruptcy as one of your options. If this is the case then there are a few things that you will want to take into consideration. You sertainly don't want to let your creditors know that you are considering bankruptcy, or they make the preemptive move of seeking a default judgement against you.
The Latest Information on Liquidation and Insolvency
By: hillarymillman | 27/10/2007 | ScienceWith the U.S. economy in a steep nose dive, more and more companies are finding that they can no longer do business profitably and are having to choose to liquidate their assets to pay off their debts. When faced with liquidation it is important that you stay focused, so you can get through it and maintain good standing with your creditors, so they will be there for you when the economy finally turns around in a few years.
Some Great Facts on Insolvency
By: hillarymillman | 27/10/2007 | ScienceLiquidation is term that is used to describe a process that is used to raise capital by means of selling off a companies assets. These assets can be tangible properties such as tools and equipment or can even be less tangible properties such as patents or any other paper assets.