How Liquidation Can Help Struggling Companies

How Liquidation Can Help Struggling Companies

Businesses can go through a whirlwind of events throughout their lifetime, with one of the most important yet undesirable possible milestones of a company’s journey being the liquidation of that company. Indeed, the word “liquidation” invokes a negative reaction, but sometimes it is a necessary and capital-saving move for businesses going through a period of transition, either because of low performance, accumulated debts, or other reasons.

 

Typically, liquidation happens when the company decides to end their operations for a variety of reasons. While they are often used interchangeably, liquidation and bankruptcy are terms with different applications. Bankruptcy applies to individuals who cannot repay their debts, whereas liquidation applies to companies and only works to shut down the company and redistribute its assets. Directors and creditors can be part of a liquidated company while not being bankrupt themselves.

 

In fact, liquidation of a company provides a lifeline by way of allowing companies to sell off their assets.

 

Oftentimes, the decision to liquidate is voluntary. Creditors vote for liquidation because of the benefits provided by the process, chief of them all being the payment of debts to the creditors via asset selling. Another immediate advantage of voluntary liquidation is that all remaining debt that is not personally guaranteed will be written off. Furthermore, legal action against a company can be terminated after liquidation, thus freeing company directors from the burden of lawsuits and allowing them to pursue new ventures. It is advised that you should seek further advice from experts pertaining to legal action and the liquidation of a company, as this oftentimes depends on the circumstances of liquidation.

 

Liquidating companies such as Infinity Asset Solutions help take the burden of asset distribution away from liquidated companies. By helping liquidated companies auction off their assets, we give creditors a chance to be fairly compensated, and help wrap up all the loose ends of a company’s assets.

 

Considering how complex and stressful the liquidation of a company is, Infinity Asset Solutions seeks to make the process as smooth and headache-free as possible. Whatever your business situation is, it is good to know that you still have prospects and options even after liquidation occurs.