Entity: LIQUIDATION
Liquidation is the process of closing a business to sell its assets and pay off debts. It involves realizing assets for cash and distributing them to claimants.
LIQUIDATION
Etymology
The term 'liquidation' originates from the Latin word 'liquidare,' meaning 'to make clear or transparent.'
Definition
Liquidation refers to the process of closing a business, selling its assets for cash, and distributing the proceeds to creditors to pay off debts. It is typically done when a company is insolvent and cannot meet its financial obligations.
Historical Context
Liquidation has been a common practice throughout history, used to wind up businesses, estates, or financial entities that are no longer viable.
Cultural Significance
In the business world, liquidation is often seen as a last resort to resolve financial issues and settle debts. It can have significant implications for stakeholders, employees, and the economy.
Related Concepts
- Bankruptcy: A legal process for individuals or businesses unable to repay their debts.
- Insolvency: The state of being unable to pay debts as they fall due.
See Also
The process of bringing a business to an end, selling its assets for cash, and distributing them to claimants.