If your company is experiencing financial difficulties,
get in touch with an Insolvency Practitioner as soon as possible. The earlier you act, the greater your range of options, and it may be possible to save the business.
How does compulsory liquidation (winding up a company) work?
If your company or partnership owes a creditor £750, that creditor can petition the Court for a winding up order and for your company or partnership to be placed into compulsory liquidation.
Any creditor (including HMRC, the bank or a trade supplier) can apply to wind up an insolvent company through compulsory liquidation. This is usually the last resort for a creditor to get paid. In this situation the winding-up petition can be withdrawn if your company pays the debt or makes an arrangement to pay it (with a
Company Voluntary Arrangement for example.)
Compulsory liquidation can be an alternative to a
Creditor’s Voluntary Liquidation.
Directors and contributories (shareholders) can also petition the Court for a Compulsory Winding Up.
What happens when you wind-up a company?
When a company is wound up, the company ceases to trade, and all employees are made redundant. The company’s assets are used to pay off any debts and any money left over goes to shareholders. The company is then dissolved and removed from the Companies House register.
Liquidation is overseen by a liquidator (either the Official Receiver or an insolvency practitioner).
In a compulsory liquidation the Official Receiver must submit a report of the conduct of anyone who has been a director of the company in the past three years.
The report is submitted to the Department of Business, Energy and Industrial Strategy who assess the report and decide whether the directors should be allowed to act as directors of other limited companies in the future.
How MOORE can help
The experienced Insolvency Practitioners at Moore will review your situation and talk you through the range of options available which can include paying off the debt or putting a
Company Voluntary Arrangement (CVA) in place. A CVA is a formal arrangement between your insolvent business and your creditors. If we can save your business, that will be our first objective.
If liquidation is the most appropriate option, we’ll manage this for you, explaining every step along the way.
Cost of service:
The cost of our service depends on the complexity of the case, but we will be happy to provide a no-obligation fee quote on enquiry.
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