Compulsory Liquidation

Compulsory Liquidation Advice for Limited Companies

Have you been contacted by a creditor with regards t a compulsory liquidation. If so we can assist you please call us or apply online for help and assistance with the compulsory liquidation procedure.

Compulsory liquidation or compulsory winding up is when the court makes an order for the company to be wound up on the petition of an appropriate person. If there is more than one director, all the directors must jointly present the winding-up petition - a single director cannot present a winding-up petition.

What are the alternatives to compulsory liquidation?

There are 3 possible alternatives to compulsory liquidation in the UK:

  1. Informal Arrangement - the company could consider writing to all its creditors to see if a mutually acceptable agreement can be reached. It is advisable to include a timetable of when payments will be made.
  2. Company Voluntary Arrangement (CVA) - this is a formal version of the arrangement described above. The directors would need to apply to the court with the help of an authorised insolvency practitioner, who would supervise the arrangement and pay the creditors in line with the accepted proposals.
  3. Administration - this is a court procedure that gives the company some breathing space from any action by creditors. A court can grant an administration order to enable the company to:
    • Survive, in whole or in part, as an ongoing business;
    • Organise a voluntary arrangement or compromise with its creditors; Get a better realisation of assets than would be possible if the company went into liquidation.
    • The procedure is managed by an administrator, who must be an authorised insolvency practitioner.

Before you take any action to put a company into liquidation, you should obtain your own legal or financial advice about this procedure and any other options available to you. Please feel free to call us today or apply online for advice on compulsory liquidation