Compulsory Liquidation
Compulsory Liquidation is the legal procedure by which a creditor begins the liquidation procedure as a result of an unpaid debt. The creditor will issue a winding up petition in court and a date will be set for the hearing of the petition. The peption will be served on the company and it will be advertised in the London Gazette. If arrangements have not been made to pay the petition debt before the hearing a winding up order will be made and the Official Receiver will be appointed liquidator.
If your company is threatened with a winding up petition you will require immediate advice and guidance from one of our experts . Once the petition has been advertised your bank account will be frozen, preventing the company from trading so it is prudent to deal with the petition before this stage.
What happens when a winding up order is made?
The company will immediately cease to trade and the Official Receiver, in his capacity as liquidator, will:
- Consider whether it is appropriate to appoint an independent Insolvency Practitioner to act as Liquidator.
- Protect and realise the company’s assets.
- Make repayment to creditors should funds allow.
- Undertake an investigation as to the circumstances surrounding the company’s failure.
How long is the Compulsory Liquidation process?
This can vary depending on the circumstances of the case.
It’s also important to note that this process cannot be reversed. The court order is legally binding and once this form of liquidation is completed your company will cease to exist.
What does Compulsory Liquidation mean for Directors?
Once your company has been placed into compulsory liquidation, the Directors power cease however they will have an obligation to assist the Official Receiver with the liquidation of the company by way of:
- Completing a questionnaire and potentially being interviewed by the Official Receiver
- Delivering up the books and records of the company
- Assisting with the realisations of company’s assets, including any information if assets are held by an external party.
Failure to cooperate with theOfficial Receiver may result in court proceedings being issued.
Advice on Compulsory Liquidation from Restart BTi
If you have any questions regarding Compulsory Liquidation and what this process means for your business, then get in touch with one of our experienced team members at Restart BTi. Simply contact us now via phone or email, or simply complete the short form below for one of our trained practitioners to get in touch.
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Restart BTi
Suite 42 Dunston House
Dunston Road
Chesterfield
Derbyshire
S41 9QD
- 01246 959 388
- Fax: 03333 444 993
- Email: enquiries@restartbti.co.uk
Restart BTi is the trading name of Restart Business Turnaround Insolvency Limited, a limited company registered in England and Wales no: 11517419
Registered Office: Suite 42 Dunston House, Dunston Road, Chesterfield S41 9QD
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