Final answer:
The inability of a company to pay its obligations when due is known as insolvency, which can lead to bankruptcy where assets are sold to pay back creditors. Liquidation is the end of a business and the distribution of its assets, while receivership is the custodianship of a business by a legally appointed receiver.
Step-by-step explanation:
The inability of a company to pay its obligations when due is known as insolvency. Insolvency can lead to legal measures such as bankruptcy, but they are not synonymous. Bankruptcy is a legal proceeding involving a person or business that is unable to repay outstanding debts, which is declared by a court. This often involves the selling of assets to pay back creditors. The term liquidation refers to the process of bringing a business to an end and distributing its assets to claimants, which is usually a result of bankruptcy.
Receivership is a situation in which an institution or enterprise is being held by a receiver, a person appointed with the legal responsibility for the property of others, including tangible and intangible assets and rights.