Company Liquidation refers to when a company's assets are liquidated - that is, redistributed or sold.
Voluntary liquidation of a company starts when the directors pass a resolution. If the business is still operating when the resolution is made, the company generally stops carrying on its business at that time.
If solvent, the directors then appoint a liquidator and proceed with a voluntary winding up of the company.
However, if the company is insolvent, the liquidation will proceed as a creditor's voluntary winding-up. A meeting of creditors will be called. Company Directors must report to this meeting on the company's affairs.
See also What is Insolvent Trading?