
Compulsory Liquidation
A court-ordered process to close an insolvent company—supporting directors through a difficult time with clarity, care, and expert guidance.
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At Marchford, we support directors who are facing the threat—or reality—of compulsory liquidation proceedings.
Compulsory liquidation is a serious and often urgent situation, typically brought about when creditors petition the court to wind up your company due to unpaid debts. If this is happening to you, early advice is essential.
Our team will help you understand your position, protect your interests, and manage your response in a way that meets your legal obligations and supports the best possible outcome.

Why Choose Marchford for Support with Compulsory Liquidation?
We’ve worked with directors in difficult situations, providing calm, professional advice when it’s needed most. If your company is facing a winding-up petition, we can help you take control of what happens next.

Understand Your Position
We explain what the petition means for you and your company, and what steps you need to take right away.

Protect Your Interests
We act quickly to help you comply with your duties and reduce the risk of personal consequences.

Clear Guidance
Straightforward advice at every stage, so you’re not left second-guessing what’s happening or what’s next.

Specialist Support
Our team is experienced in helping you deal with creditors, legal deadlines, and official processes.
If you’re facing a winding-up petition or concerned about a compulsory liquidation, request a callback for a free, confidential consultation. Alternatively, use our one-minute quote form to get started online.
How Marchford Can Support You Through Compulsory Liquidation
If a creditor has issued a winding-up petition, it’s important to act quickly. Ignoring the process can lead to the court ordering your company into liquidation—removing control from directors and triggering serious consequences.
We help you understand the situation and respond appropriately. Whether the goal is to oppose the petition, negotiate with creditors, or prepare for liquidation, we’ll guide you through every step.
When Should You Take Action?
Early intervention is key. You should seek advice immediately if any of the following apply:
A statutory demand has been served – A formal demand for payment that can lead to a petition if ignored.
A winding-up petition has been issued – This is the start of court proceedings and must be addressed without delay.
Your company is insolvent – You’re unable to pay debts as they fall due and cannot see a route to recovery.
Creditors are threatening legal action – Even the threat of a petition should be taken seriously and responded to carefully.
The Role of the Insolvency Practitioner in Compulsory Liquidation
If the court grants a winding-up order, the Official Receiver is automatically appointed as liquidator. In some cases, an independent insolvency practitioner may be appointed later.
Their role includes:
Taking control of the company and all its assets
Investigating the company’s financial affairs and director conduct
Selling assets and distributing proceeds to creditors
Reporting on any misconduct or irregularities
As with all insolvency processes, directors’ actions in the period leading up to liquidation are reviewed. This may include:
Wrongful trading
Preferential payments
Transactions at undervalue
Use of director’s loan accounts
Misuse of company borrowing or Bounce Back Loans
If issues are identified, the liquidator may seek to recover funds or take further action in the interest of creditors.
For free confidential advice, get in touch today.
Get free, confidential advice today.
Enter your details and a client advisor can find you the right solution.
By submitting this form, I give Marchford permission to contact me. More information can be found in our privacy policy here
Director Advice Line: 01752 874856
FAQs: Compulsory Liquidation
Liquidating your limited company can be a stressful time and for most there may be many questions you havewhich we have answered here.
Please do not hesitate to get in touch if you wish to speak to someone.
Compulsory liquidation is a court-ordered process where a company is forced to close due to unpaid debts. It usually begins with a winding-up petition from a creditor.
It’s a legal action filed by a creditor who is owed £750 or more. If granted by the court, it results in a winding-up order and the company is closed down.
In some cases, yes. You may be able to settle the debt, dispute the petition, or propose a Company Voluntary Arrangement (CVA). Acting quickly is essential.
The company is placed into liquidation, trading must stop, and control is passed to the liquidator. Assets are sold and creditors are repaid in order of priority.
You lose control of the company and must cooperate with the liquidator. If any misconduct is found, you may face personal consequences or disqualification.
Yes, compulsory liquidation results in the termination of all employment contracts. Employees may be entitled to claim redundancy and other payments from the government.
Not normally, unless there’s evidence of wrongdoing. The liquidator will investigate and may take action if directors breached their duties.
In most cases, yes. However, you may be disqualified if you’re found to have acted irresponsibly. Using a similar company name also has legal restrictions.
The timeline varies, but the company typically ceases trading immediately after the order. Full closure depends on the complexity of the case and asset realisation.
If you are the director, you are not usually required to attend unless you are disputing the petition. The court process is typically managed by legal representatives.
Received a Winding-Up Petition? Speak to Us Today.
If your company is facing compulsory liquidation, it’s vital to act quickly. We offer calm, professional support to help you understand your options and protect your position.
Get in touch for a confidential consultation. There’s no obligation—just practical advice and clear next steps to help you take control of the situation.

By submitting this form, I give Marchford permission to contact me. More information can be found in our privacy policy here