There are 3 things that you absolutely must get right when it comes to work parties. Do them wrong and an event that you intend as a benefit and sign of goodwill will be universally loathed and demeaned for months before it rolls around again, distracting everyone from their work and giving them one more reason to hate you.
1. Attendance. Is your party a social function or a work function? If it's a social function, why does everyone have to come? Why can't they bring their significant other(s)? If it's a work function, abandon all pretense and pay everyone for their time. Better yet, don't have a party. They already have to put up with you all day. Aren't they allowed to have some time to themselves to berate you in private? And if you say 'Then let's have it during work hours', you are conveniently forgetting that doing so means that all of your employees' deadlines must move up an entire day to make room for a party that no one wants to go to. In other words, you suck.
2. Oversight. Here's the best idea yet: Throw a work party, but don't go. Let an employee committee plan it - venue, theme, etc. - just give them a reasonable budget and a few guidelines to keep you from getting sued. You know - like your first college mixer (are those still a thing?). They'll plan an event that they think is fun (bacon grease limbo night is my personal favorite), as opposed to the cornhole tournament at the VFW hall that you planned. Best of all, if the event is a bust, you're off the hook - everyone will blame the party committee (who are usually troublemakers, anyway, am I right?). You can't lose!
3. Booze. Okay, here we go: I know that you're scared to death of the 'L Words' (Liability and Litigation), and there is wisdom in your fear; some people just can't handle their liquor, and will do things under its influence that will likely get them a) fired, b) one hell of a reputation, or c) killed. But if you're going to go ahead and throw the party, not buying drinks for those who want them is just going to look cheap. So how do you do it right? Simple: Drink tokens. Allow 2 per person, and anything else they drink is out of their own pocket (and out of your control - there go the two L's). Lots of companies do this, and it works a treat. Employees get enough free hooch to loosen up and appreciate your generosity, but not so much that they dance naked on the bar (if you think I'm joking, you're wrong).
But better yet... If you have a budget for this, don't throw a party. Your employees don't need it. You know what they'll appreciate more? Money. Give them the money you budgeted for this, and let them decide whether to do something fun without you around (employees need to vent about the boss; it's normal and healthy - as long as it doesn't happen at work) or pocket the dough. Again, either way, you win. And what's better than that?