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Need Company Liquidation Advice? Thinking of Liquidating a Company?

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*Important* - Remember to Ask About Directors' Redundancy When Enquiring About Liquidation Options - Average Claim is £9,000

Compulsory Liquidation vs Voluntary Liquidation

The first thing you should know is that there are two types of liquidation – compulsory and voluntary:


A compulsory liquidation is forced upon an insolvent company by creditors that seek a winding up order from the Court. Proceeds from the sale of the company's assets are then used to repay creditors as much as possible.


A voluntary liquidation occurs when the directors/owners of a company make a concerted decision to close down the business and move on. Once the directors have elected to liquidate the process is relatively straightforward.

When is Compulsory Liquidation Possible?

The most reliable way for a creditor to put a company into compulsory liquidation is to make a formal payment demand to the registered address of the indebted company. A creditor can only seek to wind up the company if the debt is worth more than £750. Once your company has been served with a formal payment demand you'll have to satisfy the demand or the creditor will likely proceed in petitioning for a winding up order.


Some financial agreements contain provisions allowing the creditor to appoint a receiver of an indebted company in the event of default. Failing to make payments on any type of secured loan or line of credit could result in your company being subjected to a rather quick and unpleasant procedure.

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We explain what business rescue options are available to you as the business owner, and it is you as the director who stays in control and decides what route to take. It makes no sense for our client directors to feel pressured into something that they believe does not favour them. Keith Tully Partner
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Can a Compulsory Liquidation Be Stopped?

A compulsory liquidation can be stopped only if the creditor decides to stop taking action or the court denies the request to issue a winding up order.

There are really only two ways to satisfy the creditor's demands and avoid liquidation – you can repay them the amount they're owed, or you can attempt to reach an agreement to settle over time.

If you have not yet been issued a statutory payment demand or a copy of a winding up petition then you have a good chance of being able to avoid liquidation if you act quickly.

How Do You Liquidate a Company Voluntarily?

Liquidating a company voluntarily is as simple as holding a meeting to affirm that the majority of the board of directors are in agreement with the decision to wind up. We can help you streamline this process with minimal effort on your behalf, and if you're interested in possibly taking some of the company's assets with you to a new business we may be able to help you do so through a pre-pack administrationWith 75 offices across the UK, you’re never far away from expert and confidential advice.


If your company seems to be on the verge of compulsory liquidation, or you'd like to look into the option of initiating a voluntary liquidation, feel free to send us an email or call us on 0800 644 6080 for free confidential advice. Our experienced insolvency specialists can help you assess and address the issue expeditiously and effectively.

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  • Company Directors
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