A compulsory liquidation is often referred to as a ‘winding-up by the court’. This procedure is the ultimate sanction against a business that defaults on basic obligations to creditors. The compulsory liquidation is ordered by the court, typically following the petition of a creditor, the company or its shareholders.
Initially The Official Receiver becomes the first Liquidator following the order and in some cases may pass the management of the case over to a Licensed Insolvency Practitioner.
The Liquidator’s duties are similar to those as in a CVL with the exception that the Official Receiver investigates the Directors conduct.