Liquidation can also refer to the act of exiting a securities position.In the simplest terms, this means selling the position for cash; another approach is to take an equal but opposite position in the same security, for example, by shorting the same number of shares that make up a long position in a stock.
In United Kingdom and United States law and business, liquidation is the process by which a company (or part of a company) is brought to an end, and the assets and property of the company are redistributed.Liquidation can also refer to the process of selling off inventory, usually at steep discounts.It is not necessary to file for bankruptcy to liquidate inventory.Finally, shareholders receive any remaining assets, in the unlikely event that there are any.In such cases, investors in preferred stock have priority over holders of common stock.In addition, the term "liquidation" is sometimes used when a company wants to divest itself of some of its assets.
This is used, for instance, when a retail establishment wants to close stores.
It can take account of personal relationships of mutual trust and confidence in small parties, particularly, for example, where there is a breach of an understanding that all of the members may participate in the business, Upon hearing the application, the court may either dismiss the petition, or make the order for winding-up.
The court may dismiss the application if the petitioner unreasonably refrains from an alternative course of action.
A creditors’ voluntary liquidation (CVL) is a process designed to allow an insolvent company to close voluntarily.
The decision to liquidate is made by a board resolution, but instigated by the director(s).
They will sell to a company that specializes in store liquidation instead of attempting to run a store closure sale themselves.