Editing Liquidation (section)

{{short description|Financial process by which a company is ended}}
{{Redirect|Winding-up|cognate expressions|Wind-up (disambiguation){{!}}Wind-up}}
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{{for|the process of a solid becoming a liquid|Liquefaction}}
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{{Insolvency}}
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'''Liquidation''' is the process in accounting by which a [[Company (law)|company]] is brought to an end. The assets and property of the business are redistributed. When a firm has been liquidated, it is sometimes referred to as [[:wikt:wind up#Noun|wound-up]] or '''dissolved''', although [[Dissolution (law)|dissolution]] technically refers to the last stage of liquidation. The process of liquidation also arises when [[customs]], an [[authority]] or [[Government agency|agency]] in a [[country]] responsible for collecting and safeguarding [[Duty (economics)|customs duties]], determines the final computation or ascertainment of the duties or drawback accruing on an entry.<ref>19 CFR §159.1.</ref>

Liquidation may either be compulsory (sometimes referred to as a ''creditors' liquidation'' or ''receivership'' following [[bankruptcy]], which may result in the court creating a "liquidation trust"; or sometimes a court can mandate the appointment of a liquidator e.g. ''wind-up order'' in Australia) or voluntary (sometimes referred to as a ''shareholders' liquidation'' or ''members' liquidation'', although some voluntary liquidations are controlled by the creditors).

The term "liquidation" is also sometimes used informally to describe a company seeking to [[divestment|divest]] of some of its assets. For instance, a [[retail chain]] may wish to close some of its stores. For efficiency's sake, it will often sell these at a discount to a company specializing in [[real estate company|real estate]] liquidation instead of becoming involved in an area it may lack sufficient expertise in to operate with maximum profitability. A company may also operate in a "receivership-like" state but calmly sell its assets, for example to prevent its portfolio being written off in the event of an actual compulsory liquidation.