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Liquidation is the winding up of a business organization or it is like an insolvency process by which a company is brought to a wound up. In Liquidation, all the company’s assets and the property is redistributed to all the company’s creditors. When a company or an organization has taken some debt and now it has become insolvent and is no longer in the position to clear its debts, then business liquidation advice at Aone Accounting & Bookkeeping occurs. To oversee the liquidation process a liquidator is appointed. A Liquidator is an independent person who ensures that all the things and interests of the directors, members, and creditors are treated properly and fairly. The liquidation is of two types:


1- Voluntary Liquidation- In a voluntary liquidation, to make the process fair for all members, a liquidator is appointed. He is answerable to the members and the shareholders.


2- Compulsory Liquidation- In compulsory liquidation, all the assets and property of the company are redistributed to the creditors of the company through the court orders and after the court gives the order to dissolve the company, liquidation is ended.


There are many reasons for the liquidation of the company. Apart from the insolvency, another reason why business liquidation occurs when the owner of the company owner doesn’t want to continue the business. The remaining positive balance of the company after distributing all the assets and property and paying the money to all the creditors is distributed among the shareholders of the company. So after knowing the definition of liquidation, it’s time to move towards the factors that can lead to liquidation. Some of them are:


1- Late Payments- If the company is receiving late payments from the customers, then it can lead to business liquidation.


2- Incorrect Pricing of Products- It is important to keep the prices genuine because incorrect prices otherwise, business liquidation can occur.






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