Whether in a bankruptcy or a liquidating dividend, a liquation is the same.

The assets of a business are being sold and the company is shrinking in size.

When a company’s assets are liquidated, or converted to cash, the cash is then used to pay off creditors.

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The process of liquidation also arises when customs, an authority or agency in a country responsible for collecting and safeguarding customs duties, determines the final computation or ascertainment of the duties or drawback accruing on an entry.

Liquidation may either be compulsory (sometimes referred to as a creditors' liquidation) or voluntary (sometimes referred to as a shareholders' liquidation, although some voluntary liquidations are controlled by the creditors, see below).

Once all the assets have been sold, the business is shut down.

In the accounting world, liquidation refers to the process of selling all of a company’s assets to generate cash to pay off creditors, or anyone the company owes money to. Other business assets that could be liquidated include: Liquidation sales often occur as part of a bankruptcy filing, but not necessarily.

Liquidation generally refers to the process of selling off a company’s inventory, typically at a big discount, to generate cash.

In most cases, a liquidation sale is a precursor to a business closing.

A business could liquidate most or all of its inventory as part of a move to a new location, thereby saving money on having to transport all of it to a new storefront.

The biggest downside of inventory liquidation is that, in many cases, the timetable for liquidating assets is short, so the discounts are steep and the cash earned is much lower than the retail value.

Businesses can liquidate their assets for any number of reasons, but the main two reasons are the company is failing and restructuring or investors want to leave the business.