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Liquidation Meaning: Definition, Examples, and Translations

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liquidation

[ˌlɪkwɪˈdeɪʃən ]

Definitions

Context #1 | Noun

business

The process of selling all the assets of a business in order to pay off its debts; the winding up of a company

Synonyms

bankruptcy, closure, dissolution.

Which Synonym Should You Choose?

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Word Description / Examples
liquidation

Use when discussing the process of selling a company's assets to pay off its debts.

  • The company is undergoing liquidation to settle its outstanding debts
  • Due to severe financial problems, they have decided to go into liquidation
closure

Best used when speaking about shutting down a business or organization permanently, not necessarily due to financial trouble.

  • The small cafe announced its closure after ten years of business
  • Due to management issues, the company faced closure
bankruptcy

Appropriate when referring to the legal status of an individual or entity that cannot repay the debts it owes to creditors.

  • After years of financial struggle, the entrepreneur filed for bankruptcy
  • The retailer went bankrupt after failing to secure new funding
dissolution

Typically applied to formally ending a partnership, company, or organization, implying a legal process involved.

  • The partners agreed on the dissolution of their firm
  • Following the legal procedures, they announced the dissolution of the corporation

Examples of usage

  • The company went into liquidation after failing to make a profit for several years.
  • The liquidation of the business resulted in the loss of many jobs.
Context #2 | Noun

finance

The act of converting assets into cash; the process of settling financial obligations

Synonyms

conversion, disposal, sale.

Which Synonym Should You Choose?

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Word Description / Examples
liquidation

Liquidation is used in financial or business contexts when a company or asset is being brought to an end and its assets are distributed to claimants. This term often has a negative connotation as it implies that the entity is closing down.

  • The company went into liquidation after it failed to secure additional funding.
  • The liquidation of assets helped to pay off the corporation's debts.
sale

Sale is used when items or services are being sold at a price. It is often used in retail, business, or real estate contexts.

  • The holiday season is a great time for finding goods on sale.
  • They put up their house for sale to move to a bigger city.
disposal

Disposal is used when something is being got rid of, typically as waste or something no longer needed. This word is often used in environmental, waste management, or legal contexts.

  • Proper disposal of hazardous materials is crucial for environmental safety.
  • She was responsible for the disposal of the outdated office equipment.
conversion

Conversion is used when something is being changed from one form to another. It can be used in various contexts, including financial, technical, or general everyday changes.

  • The conversion of the old warehouse into modern apartments took several months.
  • Bitcoin conversion rates have been fluctuating wildly.

Examples of usage

  • The liquidation of the investment portfolio helped to raise funds for the new project.
  • The bank initiated the liquidation of the assets to recover the loan amount.

Translations

To see the translation, please select a language from the options available.

Interesting Facts

Business

  • Liquidation occurs when a company is unable to pay its debts and must sell its assets to settle obligations.
  • There are two main types of liquidation: voluntary (initiated by the company) and involuntary (forced by creditors).
  • Liquidation can be an orderly process with strategic sales, or it can be hasty, affecting the final amounts realized from asset sales.

Legal Implications

  • During liquidation, different stakeholders must be prioritized, with creditors typically paid before shareholders.
  • The liquidation process is governed by specific laws that protect the rights of all parties involved, including employees and creditors.

Cultural Representation

  • In popular media, liquidation businesses are often depicted as profitable ventures where assets are sold quickly at auctions.
  • Liquidation sales are commonly featured in movies and shows to illustrate financial collapse, creating a sense of urgency and excitement.

Psychological Aspects

  • The process can be emotionally taxing for business owners, leading to feelings of failure despite being a common practice.
  • Research indicates that the stress of facing liquidation can impact personal relationships and mental health during the process.

Origin of 'liquidation'

Main points about word origin

  • The word comes from the Latin 'liquidatio', which means 'to make liquid' or 'to dissolve'.
  • The term originally referred to the act of turning a solid substance into a liquid, reflecting the concept of converting assets into cash.

The word 'liquidation' originated from the Latin word 'liquidare', which means 'to make clear or bright'. In the business context, liquidation refers to the process of selling off assets to clear debts or settle financial obligations. The term has been used in various industries and financial sectors to describe the process of winding up a company or converting assets into cash.

See also: liquefiable, liquefy, liquidate, liquidator, liquidity, liquidized, liquidizer, liquids.

Word Frequency Rank

Position #7,547 indicates this is an advanced-level word. While not essential for basic communication, it will enhance your ability to understand and create more nuanced content.