Liquidation is the shutdown of a business or business segment. The business sells off assets to pay off creditors and other liabilities. After settling all the claims, the residual funds get distributed among the owners, shareholders, and investors. A liquidator or an insolvency practitioner is hired to handle the dissolution professionally. The liquidator then sells corporate assets in the open market and generates funds. This directly compensates creditors and lenders. Liquidators also impose their charges for services rendered. The process varies slightly from business to business based on different factors like complexity, firm size, etc.
