Liquidating assets and closing a company involves complex processes beyond simple tasks like disconnecting a phone connection or turning off a light switch.

A liquidation audit serves several crucial purposes. It is a mandatory requirement for businesses undergoing closure to submit a liquidation audit report to the relevant authorities. This report is necessary to obtain the company closure certificate, and it details the company’s assets and liabilities, ensuring transparency and precluding objections from creditors.

Throughout the liquidation process, the company’s assets are converted into cash, and the proceeds are distributed to creditors or used to fulfill other company obligations. The distribution of assets follows specific rules, emphasizing the importance of accurate and complete information available to the liquidator. The liquidation audit plays a critical role in ensuring the accuracy and completeness of this information.

After the company’s liquidation is finalized, a post-liquidation audit may be conducted to verify that assets are appropriately valued and distributed. This report helps creditors understand the distribution process and how the funds they received were calculated. By providing clarity, the post-liquidation audit report reduces the likelihood of creditors questioning the liquidator’s actions.