Explain the difference between liquidation and dissolution.?

Question

Explain the difference between liquidation and dissolution.?

Answer 1

Liquidation is the process of converting all assets into cash.  Proceeds of which will be used to pay-out its obligations in the order set-out by the standards/court.

Dissolution means to end the legal entity.  To officially close a business.

Answer 2

Liquidation would be the sale of inventory and other assets for cash. Dissolution would be the termination of one's business operations. Dissolution may be the cause of the liquidation. If a business "dissolves" they will in many instances have to liquidate their assets (including office furniture, computers, etc) in order to pay off creditors (or just to get rid of the stuff!)