What is liquidation?

When a new company/close corporation is registered, it is almost always done with the intention of operating it successfully and profitably.  Intentions, however, are often not achieved.  Short, medium, and long-term occurrences can and frequently do have adverse consequences on a business and its cashflow.  What this means for many, is the looming threat of liquidation.

Liquidation involves a company closing its doors due to unpayable debts.  All assets the company has are sold and the proceeds from the sale of the assets are then divided by the appointed Liquidator in terms of the laws of insolvency.