Voluntary Liquidation

Voluntary liquidation is a legal process by which a company distributes its assets to its shareholders and employees. The company’s directors or trustees, in consultation with the company’s creditors, may decide to liquidate the company by selling its assets and distributing the proceeds to its shareholders and employees.

If the company is not able to pay its debts as they come due, creditors may force it into involuntary liquidation. In either case, the bankruptcy court will supervise the liquidation process.

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