What does 'liquidation' mean in corporate law?

In corporate law, 'liquidation' refers to the process of winding up a corporation's financial obligations and distributing any remaining assets to the stakeholders after all liabilities have been settled. This typically occurs when a corporation is dissolving and unable to continue its business operations, either due to financial difficulties or strategic decisions.

During liquidation, the company's assets are sold off, and the proceeds are used to pay creditors and settle debts. After all obligations are fulfilled, any remaining assets are distributed to the shareholders according to their ownership interests. This process is crucial for ensuring that debts are paid responsibly and that the remaining resources are fairly given back to those who invested in the company.

The other options pertain to different concepts unrelated to the specific process of liquidation. A strategy for corporate expansion would involve growth initiatives, managing employee dismissals deals with workforce restructuring, and increasing corporate profits focuses on revenue generation rather than asset distribution and liability settlement.