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Liquidation: Solving Financial Woes Of A Company Liquidation: The Final Alternative Being in business is always a risky proposition. Often a company might face a financial crunch and to tide out of this crisis the company might need to liquidate its assets. Liquidation of a company takes place when the company or any part of it is shut down and the asset and the property of the company are reorganized. Dissolution is the last stage of liquidation. Three kinds of liquidation could take place with a company. These are the compulsory liquidation, creditors’ voluntary liquidation and voluntary liquidation. Compulsory liquidation is also known as creditors’ liquidation while voluntary liquidations are known as shareholders liquidation. The type of liquidation adopted in case of any company depends on the situation the company. There could be liquidation because of insolvency of the company, as it has not paid the debts that it owed. If Liquidation is a result of financial loss and owners want to wrap up their venture, then the asset is changed into cash. The persons who are by law made to sign an appeal for liquidation of a company can be the official receiver, a creditor who has established a prima facie, the security of the state or the company itself.