Compulsory liquidation often occurs when one or more creditors petition the court for the company to be wound up.
The company has an opportunity to defend itself in court if they dispute the debt but if the judge rules the debt is valid and overdue the winding up order is likely to be made.
Sometimes a breakdown in the relationship between directors and/or shareholders results in a position where some feel it is right for the company to be wound up and in this case those directors or shareholders can petition for the winding up.
If a company becomes aware of a petition for winding up they should contact BRI immediately as we can often help to avoid a compulsory liquidation.
The Official Receiver is automatically appointed as liquidator in a compulsory liquidation. Creditors would get the opportunity to appoint an alternative insolvency practitioner but only if they held sufficient votes to do so.
Contact us if you would like further information and assistance regarding any aspect of liquidating your business. There is no charge for doing so and it is without obligation