What is the cost of liquidating a company
Broadly speaking, the liquidation process is as follows: There is a hierarchy that determines the order in which a company's assets must be distributed in a liquidation. Any secured creditors have the first right to the assets and are usually paid out before there is a distribution.In finance and economics, liquidation is an event that usually occurs when a company is insolvent, meaning it cannot pay its obligations as and when they come due. Bankruptcy Code governs liquidation proceedings; solvent companies can also file for Chapter 7, but this is uncommon. NREUM
Compulsory liquidation of a company requires obtaining a court order.
Applications by creditors are by far the most important and common.
Applications may be brought on a number of grounds, the most important being that the company is unable to pay its debts.
After these steps have been carried out, the company is formally dissolved.
The law classifies liquidations into two types: voluntary (which is by a shareholders' resolution) or compulsory (by a court order).