Furniture liquidation refers to the sale of furniture owned by a business ceasing operations or in bankruptcy. In practice, most furniture liquidations occur through businesses that specialize in furniture sales rather than from the business winding down its operations.
In some instances the term refers to the sale of other types of furniture, such as customer returns, or to the clearance of specific items in a retailer's inventory.
In legal terms, liquidation refers to the process of transferring all of a company's assets into money. In addition to occurring at the close of operations or during bankruptcy, liquidation occurs when the government seizes goods and sells them to recoup unpaid taxes, duties or other outstanding fees.