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In law and business, liquidation is the process by which a company (or part of a company) is brought to an end, and the assets and property of the company are redistributed. Liquidation is also sometimes referred to as winding-up or dissolution, although dissolution technically refers to the last stage of liquidation.he parties who are entitled by law to petition for the compulsory liquidation of a company vary from jurisdiction to jurisdiction, but generally, a petition may be lodged with the court for the compulsory liquidation of a company by:
1570s, to reduce to order, to set out clearly (of accounts), from Late Latin or Medieval Latin liquidatus, past participle of liquidare to melt, make liquid or clear, clarify, from Latin liquidus (see liquid). Sense of clear away (a debt) first recorded 1755.