The procedure is usually handled by the Official Receiver, or an appointed Insolvency Practitioner.
Compulsory liquidation is usually initiated by a creditor that is looking to force a company into closure via a court order.
The process is usually instigated with a winding up petition which is heard at court.
This procedure is often used as a last resort by disgruntled creditors after failed negotiations.
The role of a liquidator encompasses various responsibilities which include, but are not limited to: The most important thing for directors to realise when liquidating a company is that their responsibilities undergo a marked shift if the company becomes insolvent.
Once insolvent, the directors must prove they have acted in the best interests of the creditors.
However, once engaged, the Insolvency Practitioners will act immediately and the company can be placed into liquidation within a two-to-three week period if sufficient information is provided, promptly.