Liquidate or liquidation or liquidating
if someone liquidates a company, or if the company liquidates, all of its assets are sold in order to pay its debts.These examples are from the Cambridge English Corpus and from sources on the web.After selling the collateral, secured creditors use the cash from the sold assets to cover the rest of the loan.One example of a secured creditor is the bank or financial institution that loaned the business money to purchase an item. These types of creditors include credit card companies, the government, and employees.The proceeds of the sale are used to discharge any outstanding liabilities to the creditors of the company.If there are insufficient funds to pay all creditors (INSOLVENCY), preferential creditors are paid first (for example the INLAND REVENUE for tax due), then ordinary creditors pro rata.This means that a business’s assets are sold and turned into cash to pay high-priority creditors.
(Property/Casualty) exists when a corporation ceases to be a going concern and its activities are merely for the purpose of winding up its affairs, paying its debts and distributing any remaining balance to its shareholders (Regs.
There might be a few reasons you decide to liquidate your business.