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Liquidation Liquidation implies that the business is not able to pay its debts. Liquidation further implies that the business will cease to operate . Liquidation and deregistration are not the same thing. Liquidation. Liquidation implies that the business is not able to pay its debts. Liquidation further implies that the business will cease to operate (generally as a result of financial problems). Normally liquidation proceedings will be launched by a creditor of a company or close corporation because that company or close corporation is unable to effect payment of a debt due and owing to the creditor. In that instance, the creditor can apply to Court for the liquidation of that South African company or close corporation.