The liquidator represents the interests of all creditors.
The liquidator supervises the liquidation, which involves collecting and realising the company's assets (turning them into cash), discharging the company's liabilities, and distributing any funds left over among the shareholders in accordance with the company's constitution (or the COMPANIES ACT 1993 if there is no constitution).
Partnership liquidation is the process of closing the partnership and distributing its assets.
Many times partners choose to dissolve and liquidate their partnerships to start new ventures.
Sometimes partnerships will have enough cash to pay off their liabilities, but in bankruptcy situations partnerships most often don't.
If there any assets remaining after all the liabilities are paid off, these assets are distributed to the partners based on their capital accounts.
They do this to justify the net tangible asset backing for the purchase price and hopefully reduce the amount of goodwill being paid.After these steps have been carried out, the company is formally dissolved.The law classifies liquidations into two types: voluntary (which is by a shareholders' resolution) or compulsory (by a court order).In this situation there is potential conflict between creditors (those to whom money is owed), as there will be insufficient assets for all creditors to be paid in full.The law attempts to maintain an equality between creditors, so the assets are distributed proportionately according to the size of each creditor's claim.