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Free Liquidation Advice Service – Call 0800 066 2280

Free Liquidation Advice Service – Call 0800 066 2280

Compulsory Liquidation

Compulsory liquidation is usually the least favoured route by directors like yourself as you do not have any control over who will be liquidator and therefore do not have the relationship needed to ask the questions which you really need to know the answers to.

Who can put a company into compulsory liquidation?
Usually it is a creditor who is owed more than £750 who presents a petition to the court to wind up a company. Less frequently, the company itself, its directors or a shareholder may petition.

Other people who might present a petition are administrative receivers; an administrator; a supervisor of a voluntary arrangement; the Secretary of State for Business, Innovation and Skills; the Financial Services Authority; the clerk of a magistrates’ court, the official receiver or an EU Member State Liquidator.

A winding-up petition can still be presented even if a company is already in administrative receivership or voluntary liquidation.

What happens after a company goes into compulsory liquidation?
Usually, the official receiver will be appointed liquidator of the company on the making of a winding-up order. The official receiver has a duty:

as official receiver-

  • to ensure that notice of the winding-up order is advertised in the London Gazette. The official receiver might advertise the order in any other way, if they think it is appropriate to do so; and
  • to investigate the affairs of the company and to find out the cause of its failure. To do this they obtain information from the directors of the company and from third parties, such as the company’s bankers, accountants and solicitors;

as liquidator –

  • The official receiver may call a meeting of creditors to appoint an insolvency practitioner as liquidator in their place. If this happens, the official receiver still has a duty to investigate the company’s affairs. So, two people may be involved in the liquidation:
  • The official receiver also has a duty to make a report to the Secretary of State for Business, Innovation and Skills under the Company Directors Disqualification Act 1986, regarding the conduct of the company’s directors.

Then a low cost liquidation may be your solution! Contact us as soon as possible on 0800 066 2280 to start the process which is detailed below.

In all cases, the end result of liquidation is that the company is dissolved and ceases to exist as a corporate entity. Generally speaking, the directors of a limited company are not held personally liable for the debts of the dissolved business; however, if the court believes that one or more of the directors were guilty of wrongful trading while the company was insolvent, they may order the guilty party to cover a specific debt, pay a fines, or serve jail time. After the liquidation the liquidator is required to investigate and ascertain whether the directors of the insolvent company fulfilled their directors’ duties while trading insolvent. By entering into voluntary liquidation or administration with the help of a licensed insolvency practitioner instead of waiting to be wound up by creditors and the court, you can be confident that your company is taking the best course of action, and with the administration route you may even be able to recover and begin operating in a state of solvency again.

to collect and sell all assets and pay all creditors.

the liquidator, who is responsible for collecting and selling the assets and paying the creditors;

the official receiver, who investigates the company’s affairs.

Are you thinking to yourself “I need to liquidate?”, then contact us Now for free professional advice on 0800 066 2280

About

Compulsory Liquidation, also known as winding up a company, refers to the process by which a company is brought to an end allowing the director(s) to set up a new company without any debt and any hassle.

Talk to Peter

peter-anderson
Peter Anderson Licensed Insolvency Pratitioner
Peter heads up the initial advice team at Liquidation Made Easy and specialises in providing solutions to help directors of businesses when they need it most.

Speak to Peter now on 0800 066 2280

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Services

  • Creditors Voluntary Liquidation (CVL)
  • Members Voluntary Liquidation (MVL)
  • Company Voluntary Arrangement (CVA)
  • Administration
  • Compulsory Liquidation

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