Liquidation

Liquidation is the act of ending the existence of a company. The company is said to be "in liquidation" when somebody a liquidator has been appointed to wind it up.

A company will go into liquidation if it is unable to pay its debts. Its assets will be sold and whatever money raised will go to settling its debts.

A company may also be put into liquidation by its directors merely if they wish to cease trading - for example many investment trusts are run for a finite period of time.

At the end of the allotted timespan the trust is liquidated the assets realised into cash and the cash distributed to the trusts shareholders.

See Also Online share dealing service and Stockmarket Centre

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2009-02-17 00:00:00 © Moneyextra.com