During liquidation, what is typically the first step a company undertakes?

During liquidation, the first step a company typically undertakes is assessing and reporting company assets. This process involves a thorough valuation of all assets owned by the business, which is crucial for understanding the financial position of the company prior to selling off its assets or settling debts. By assessing and reporting on these assets, the company can make informed decisions about how to proceed with the liquidation process, including determining the potential proceeds from asset sales and how those funds will be allocated to creditors and other stakeholders.

This initial step is essential as it informs all subsequent actions, such as filing for bankruptcy or finding buyers for the business's assets. Without a clear understanding of the asset base, a company cannot effectively navigate the complex legal and financial implications of liquidation.