What do you mean by “a company is in liquidation”?

A simple meaning of the term ‘company is in liquidation’ would be that a company is shutting down.

There can be plenty of reasons for a company to be in liquidation:

• There is an irresolvable dispute among the shareholders.
• Corporate restructuring.
• The company cannot pay its debts and liabilities are due more than its assets.
• It is dormant or not profitable.
• There has been a breach of laws and regulations by the officers in the company.

A company is liquidated either by “striking off” or “winding up.” Even if the result of both is that the company shuts down, the procedures are very different.