Liquidation is the process of selling off a company's assets to pay its debts. This usually happens when a business is unable to continue operating, often due to financial difficulties. The goal is to convert everything the company owns, like inventory, equipment, and real estate, into cash to settle outstanding obligations with creditors. During liquidation, a liquidator may be appointed to oversee the sale of assets and ensure that the process is fair and transparent. Once all assets are sold and debts are paid, any remaining funds are distributed to the owners or shareholders, marking the end of the business.