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Pro's about Voluntary Liquidation

There are several potential benefits to undergoing voluntary or involuntary liquidation, depending on the specific circumstances of the company or close corporation in question:


Debt relief: Liquidation can provide relief for companies or close corporations that are struggling with significant debt. In a voluntary liquidation, the company or close corporation may be able to reach a settlement with its creditors and pay off its debts over time. In an involuntary liquidation, the company or close corporation's assets will be sold off in order to pay its creditors as much as possible.


Asset sale: Liquidation can be a useful way for companies or close corporations to sell off their assets in an orderly and fair manner. This can be especially beneficial if the company or close corporation is struggling financially and is unable to sell its assets through other means.


Closure: Liquidation can provide a formal way for companies or close corporations to close their operations and move on to new ventures. This can be especially beneficial if the company or close corporation is no longer viable or if the shareholders or owners wish to pursue other opportunities.


Shareholder distribution: In a voluntary liquidation, any remaining assets after the company's or close corporation's debts have been paid will be distributed to the shareholders. This can be a useful way for shareholders to receive some financial return on their investment in the company or close corporation.


However, it is important to note that liquidation also has potential drawbacks, such as the loss of jobs and the financial impact on shareholders and creditors. It is important for companies or close corporations considering liquidation to carefully weigh the potential benefits and drawbacks and to seek the advice of legal and financial professionals before proceeding.



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