How to Avoid Liquidation?

No-one plans for failure. Why would you plan for failure, when all your energy is being directed toward success? You, the entrepreneur, knows that if you were to even slightly sway from the mindset of success, you may end up drowning in the oceans of failure.

Steps to avoid Liquidation

  1. Increase liquidity internally.
  2. Revise management roles.
  3. Apply for business rescue.
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What is Liquidation?

Liquidation is the process by which a company (or part of a company) is brought to an end, and the assets and property of the company are redistributed. Liquidation is also sometimes referred to as winding-up or dissolution, although dissolution technically refers to the last stage of liquidation. The process of liquidation also arises when customs, an authority or agency in a country responsible for collecting and safeguarding customs duties, determines the final computation or ascertainment of the duties or drawback accruing on an entry.
Liquidation may either be compulsory (sometimes referred to as a creditors’ liquidation) or voluntary (sometimes referred to as a shareholders’ liquidation, although some voluntary liquidations are controlled by the creditors, see below).

Having wound-up the company’s affairs, the liquidator must call a final meeting of the members (if it is a members’ voluntary winding-up), creditors (if it is a compulsory winding-up) or both (if it is a creditors’ voluntary winding-up). The liquidator is then usually required to send final accounts to the Registrar and to notify the court. The company is then dissolved.

However, in common jurisdictions, the court has a discretion for a period of time after dissolution to declare the dissolution void to enable the completion of any unfinished business.

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