Liquidation is a process which is undertaken by many companies all over the world in order to repay their debts. Under this process, the owners or shareholders sell the real assets of their business. At present, you will find two different types of business liquidation, which are voluntary liquidation and compulsory liquidation.
Compulsory liquidation
This type of liquidation is ordered by a court and goes into action when a company fails to pay its debts. The court appoints an officer who will handle the case and ensure that procedure is completed appropriately. As soon as the assets are sold, the money is distributed amongst the debtors.
Voluntary liquidation
Unlike compulsory liquidation, voluntary liquidation takes place when the business owners or shareholders decide to sell their assets and repay debts. Other than this, there are many other reasons which can lead to voluntary liquidation. In some cases, when all the debtors are paid, the remaining money is distributed amongst the shareholders.
If you are planning to undergo business liquidation then you can opt for liquidators who will help you to sell your assets at reasonable rates, in addition helping you to pay off your debtors.
So, if you are facing financial difficulties, it is recommended to settle your debts through voluntary liquidation before the court orders compulsory liquidation.