Michael Chamberlaiin explains compulsory liquidation in this video.

What is it?

Compulsory Liquidation is where a winding up order is made by the court. A company will be ‘wound up’ by the courts following a petition issued by one of the following:

  • The company.
  • The directors.
  • A creditor.
  • A shareholder.
  • An Administrator or Administrative Receiver.

A winding up order can be made on a number of grounds but the principal ones are as follows:

  • The Company is unable to pay its debts as and when they fall due
  • It is just and equitable (common in the event of shareholder disputes).

Who is Compulsory Liquidation for?

  • Creditors who have the power to wind a debtor up with a view to the appointment of a liquidator to investigate the affairs of the company and its directors/shareholders.
  • Directors requiring the cheapest possible liquidation.

How can Chamberlain & Co help?

Chamberlain & Co can assist the directors to complete the appropriate forms to initiate the process.

The Official Receiver is usually initially appointed as the liquidator. However, a meeting of creditors will normally be called, for the majority by value, to appoint a licensed insolvency practitioner as liquidator, who could be from Chamberlain & Co.

The Process

Once a winding up order is made the affairs of the company are dealt with by the local Official Receiver’s office who may call shareholders’ and creditors’ meetings at which a Liquidator other than the Official Receiver may be appointed.

The Liquidator in a compulsory liquidation deals principally with the realisation of assets and the agreement of creditors’ claims whilst the Official Receiver investigates the company’s affairs.


  • For the company – creditors force the liquidation process and therefore there is no cost to the company in petitioning for the winding up.
  • For the creditor – the creditor can stop the company trading.
  • It can be the cheapest form of liquidation for the directors to initiate.


  • For the company – the Official Receiver will thoroughly investigate the company and its directors.
  • For the creditor – the Official Receiver’s fees will deplete the value of the company assets.
  • It is a slower process than a CVL.
  • No viable core business is normally salvaged from this process.

Company Administration

Onwards through insolvency


Onwards through insolvency


Onwards through insolvency

Company Dissolution

Onwards through insolvency


Onwards through insolvency

Business Restructure

Onwards through insolvency

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