Liquidation

Liquidation generally occurs in the context of initiating the sale of all start-up assets before closing or simply leaving the business. It occurs when a start-up has enough financial resources to cover all its liabilities.

In liquidation, the claims of secured and unsecured creditors, bondholders and preferred shareholders take precedence over ordinary shareholders. After all the debts have been paid, the rest, if anything remains, is distributed to the shareholders.

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