This is used, for instance, when a retail establishment wants to close stores.They will sell to a company that specializes in store liquidation instead of attempting to run a store closure sale themselves.
In some jurisdictions, the company may elect to simply be struck off the companies register as a cheaper alternative to a formal winding-up and dissolution.
After the removal of all assets which are subject to retention of title arrangements, fixed security, or are otherwise subject to proprietary claims of others, the liquidator will pay the claims against the company's assets.
Generally, the priority of claims on the company's assets will be determined in the following order: Having wound-up the company's affairs, the liquidator must call a final meeting of the members (if it is a members' voluntary winding-up), creditors (if it is a compulsory winding-up) or both (if it is a creditors' voluntary winding-up).
Liquidation may either be compulsory (sometimes referred to as a creditors' liquidation) or voluntary (sometimes referred to as a shareholders' liquidation, although some voluntary liquidations are controlled by the creditors, see below).
In addition, the term "liquidation" is sometimes used when a company wants to divest itself of some of its assets.