Liquidation refers to the orderly winding-up of a company. Assets are realised, outstanding obligations are fulfilled and the remaining assets are distributed. Liquidation does not necessarily result from insolvency. It begins after a company has been dissolved. During this phase, ongoing business is concluded, receivables are collected, liabilities are settled and the remaining assets are distributed.
Liquidation may be voluntary, for example when shareholders decide to terminate a company. It may also take place on a statutory basis or in connection with other proceedings.
For business partners, liquidation is an important indication that a company is in the process of being wound up.
This may affect:
- contractual relationships,
- credit decisions,
- supplier assessments,
- due diligence reviews, and
- compliance processes.
Liquidation should not, however, be equated with insolvency.
Liquidation in the FinAPU Firmenbuch
The FinAPU Firmenbuch displays liquidations separately from bankruptcies or dissolutions.
Together with other company information, this provides a sound basis for assessing the company’s current situation.
