The process of winding up a company — selling its assets, paying creditors, and distributing any remaining surplus to shareholders — before the company is deregistered.
Liquidation (also called winding up) is the formal process for ending a company's existence. It can be voluntary (MVL — members' voluntary liquidation, if solvent) or compulsory (court-ordered, usually on insolvency). A liquidator is appointed to realise assets, pay creditors in order of preference, and distribute remaining funds. Once the liquidation account is approved and distribution made, the company is deregistered with the CIPC.
A company with more debts than assets is unable to pay its creditors. They apply to court for winding up. A liquidator is appointed, the assets are sold at auction, and the proceeds are distributed to creditors proportionally.
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