The assets and property of the company are redistributed.Liquidation is also sometimes referred to as winding-up or dissolution, although dissolution technically refers to the last stage of liquidation.Then the borrower takes the revenue generated from those business activities and uses it to repay the money that was borrowed to finance the activities.
Then when business slows down the company will have less of a need for borrowed funds to finance short-term assets like inventory accounts – the need for financing will decline as the need for inventory declines. “Analysis for Financial Management”, Mc Graw-Hill Irwin, New York, NY, 2007.
At this point, the company will have generated profits from the busy season, and will now be able to use those profits to repay the loans it took out to finance operations during the busy season. See Also: Loan Agreement Collateralized Debt Obligations When is an interest rate not as important in selecting a loan?
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In United Kingdom, Republic of Ireland and United States law and business, liquidation is the process by which a company is brought to an end.
Commercial papers are unsecured promissory notes that are issued by corporations.
These notes have a fixed maturity that is usually less than a year in length.
It can take account of personal relationships of mutual trust and confidence in small parties, particularly, for example, where there is a breach of an understanding that all of the members may participate in the business, Upon hearing the application, the court may either dismiss the petition, or make the order for winding-up.
The court may dismiss the application if the petitioner unreasonably refrains from an alternative course of action.
For example, if you are sued in court for monetary damages, the amount of damages owed is liquidated debt, but the debt only becomes liquidated once the jury or judge determines the amount of money owed.
Prior to that determination, your legal obligations are unknown, and the debt is considered unliquidated.
Whether it is a home loan, car loan or student loan, these types of liquidated debts represent an exact dollar amount that must be paid back by the loan's maturity date.