At Fast Insolvency, we offer professional support to directors whose companies are facing or undergoing compulsory liquidation in .
This court-led process is triggered when a creditor petitions to wind up a company over unpaid debts.
Contact us now for free, confidential advice if your business has received a winding-up petition or is at risk of compulsory liquidation.
What Is Compulsory Liquidation?
Compulsory liquidation is a legal process where the court orders a company to be closed and its assets sold to pay creditors.
This process begins with a winding-up petition filed by a creditor, often due to unpaid debts exceeding £750.
Who Can Apply to Wind Up a Company?
Any creditor, shareholder, or director can apply, but most petitions come from creditors such as HMRC.
The court must be satisfied that the company is insolvent and unable to pay its debts.
What Triggers Compulsory Liquidation?
The most common trigger is non-payment of debt following a statutory demand, court judgment, or ongoing default.
Once a creditor files a petition, the court sets a hearing date to determine whether to grant a winding-up order in .
What Happens After a Winding-Up Order Is Made?
Control of the company passes immediately to the Official Receiver in , who investigates director conduct, closes the business, and arranges the sale of assets.
The company ceases trading and is eventually struck off the Companies House register.
Can I Stop Compulsory Liquidation Once It Starts?
Yes, but only before the court grants the winding-up order.
You can pay the debt in full, dispute the petition, or seek a Company Voluntary Arrangement (CVA) or administration to avoid liquidation.
What Are the Consequences for Directors?
Once liquidation begins, directors lose control of the company and must cooperate fully with the Official Receiver.
They may also face investigation in , and if misconduct is found, they could be disqualified or held personally liable.
What Happens to Employees in Compulsory Liquidation?
All employees are automatically made redundant in , but they may be eligible to claim unpaid wages, redundancy pay, and holiday pay from the government’s Redundancy Payments Service.
Will I Be Personally Liable for Company Debts?
Directors are not personally liable for most company debts unless they’ve signed personal guarantees or engaged in wrongful trading in .
If the court finds misconduct, personal liability could follow.
How Long Does Compulsory Liquidation Take?
The process can take 12 to 24 months in , depending on the complexity of the company and how quickly assets are realised and creditors repaid.
Will the Company’s Assets Be Sold?
The Official Receiver or liquidator will sell company assets, such as stock, equipment, and property, to repay secured and unsecured creditors.
What Is the Role of the Official Receiver?
The Official Receiver is appointed by the court to manage the liquidation.
They investigate the company’s affairs, sell assets, deal with creditor claims, and assess director conduct during the lead-up to insolvency.
Can I Trade After Liquidation Starts?
Once the winding-up order is made, the company must cease trading immediately.
Continuing to trade could result in personal liability for debts incurred after liquidation begins.
How Does Compulsory Liquidation Differ from Voluntary Liquidation?
Compulsory liquidation is court-enforced and usually creditor-led, while voluntary liquidation is initiated by directors and shareholders.
In voluntary cases, directors have more control and can appoint their own licensed insolvency practitioner.
Is the Liquidation Process Public?
Winding-up petitions and liquidation orders are published in the London Gazette and recorded at Companies House in , making them accessible to the public.
Why Choose Fast Insolvency?
We provide immediate, expert advice in for companies facing compulsory liquidation.
Our licensed professionals act quickly to assess your situation, stop legal action where possible, and help protect you as a director.
Get Free Compulsory Liquidation Advice Today
If your company has received a winding-up petition or you’re worried about compulsory liquidation, time is critical.
Contact Fast Insolvency now for free, same-day advice and take control before the court acts.