www.company-debt.co.uk

[Sammy12]

Hi there I am trying to understand the options to close my company. Can you explain compulsory liquidation?

[Derek Cooper]

Hi there Sammy12 and welcome to the forum

Compulsory liquidation is where a company is forced to close by one of its creditors. The other name for compulsory liquidation is Winding up.

For more information on compulsory liquidation / winding up, please have a look here:
http://www.company-debt.co.uk/winding-up.html

[Graham Wilson]

Hello Sammy12

Any creditor who is owed more than £750 by the company can try to force its closure by applying at the court for a winding up petition. However, if as a director you want to close the business yourself, the process you need to use is voluntary liquidation.

Voluntary liquidation is split into members voluntary liquidation and creditors voluntary liquidation depending on whether the company is insolvent.

Does your business owe debt that it can not repay?

[Sammy12]

My business has been struggling for a while now and I do not really feel there is any point in trying to keep it going any longer. However I understand that there is a cost to liquidating the business myself so I am just thinking about all of the options.

[Steven Jackson]

Hi there Sammy12

If you are considering leaving the business for one of the creditors to wind up, I would recommend against this option. The problem with compulsory liquidation is that the court will appoint a liquidator. They will be more likely to take a dim view of your actions as a director and so the risk of being acused of wrongful trading and possibly being held personally liable for the company's debt would increase.