What do you mean by liquidation of a company?

Liquidation of a company refers to the process of winding up its operations and distributing its assets to creditors and shareholders. This typically occurs when a company is unable to meet its financial obligations, leading to either voluntary or involuntary dissolution. During liquidation, the company’s assets are sold off, and the proceeds are used to pay off debts, with any remaining funds distributed to shareholders. Ultimately, the company is removed from the register of companies and ceases to exist as a legal entity.