The compulsory liquidation of a company is generally a last resort as it needs to go through the courts, which can be a lengthy process. It is generally initiated by creditors who want to get their money back.
Because it is led by the court, once the process has been initiated, a compulsory liquidation is overseen by an official receiver. Before going ahead with this option, you should always look at all the insolvent options and alternatives. As experts, we offer free advice and highly recommend you don’t delay and get in touch today to see how we can help you. Our initial meeting is free of charge and with nearly 40 years experience, you can rest assure we are best placed to help you at this difficult time.
What You Need To Know:
- The first stage of compulsory liquidation is to file a petition to wind up the business in court.
- The most common reason for a compulsory liquidation is that the company is insolvent and unable to pay creditors. These are usually the ones to file for a winding up.
- A court hearing is held where a judge will decide whether the liquidation can go ahead. If the company has objections to winding up, they can present their case here.
- An official receiver is appointed by the court. The company and creditors may appoint their own insolvency practitioner and it’s not unusual for several to be involved in complex cases.
- The liquidator then collects the company assets and will seek to distribute these to creditors. The liquidator’s fees are also paid out of the sale of assets.
- Any assets left over can be given to those who are entitled, including shareholders.
- When the company has been through liquidation, it ceases to trade and is removed from the register at Companies House.
If you are facing a compulsory liquidation and need advice, contact us for FREE today!