What Is Compulsory Liquidation?

Compulsory liquidation is designed to wind up a business to pay creditors that are owed. This compulsory liquidation will be instructed by a court order. If the debt is more than £750 the creditor can present a winding up petition to the court to reclaim the monies owed. In most cases a compulsory liquidation process is instigated by the creditor, but it can be instigated by an administrator or the company directors themselves. In some cases, a compulsory liquidation process has been presented by the FCA, financial conduct authority. Once the winding up petition has been agreed by the courts, the liquidation process will begin. In most cases an insolvency practitioner will be appointed to support the creditor/creditors and the process of liquidation. The liquidator will release assets and review creditors’ claims.