Compulsory Liquidation

A Compulsory liquidation the least desirable outcome for directors and creditors
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What is Compulsory Liquidation?

Compulsory liquidation, also referred to as involuntary liquidation or winding up, is a legal procedure that mandates a company to cease operations and liquidate its assets to settle its debts. This process is triggered by a winding-up petition and is supervised by a court-appointed liquidator.

In simpler terms, compulsory liquidation is a last resort for companies that are unable to pay their debts. It is a legal process that forces a company to sell off its assets to pay its creditors. This process is initiated by a winding-up petition, which is usually filed by a creditor or group of creditors. Once the petition is approved, a court-appointed liquidator takes over the company's affairs and oversees the sale of its assets.

As a company director, it is crucial to take prompt action if you suspect that your company may be insolvent. By doing so, you can avoid the undesirable outcome of compulsory winding up and instead opt for the more favourable option of voluntary liquidation.

Our team of experienced insolvency professionals are here to assist you in navigating this complex process. Contact us today to learn more about how we can help you potentially avoid compulsory liquidation and achieve a smoother transition to voluntary liquidation. Don't wait until it's too late - take action now to protect your company's future.

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