Sometimes, a company can be closed down by an order of court – this is called a Compulsory Liquidation.

This is kicked off by a petition which is usually presented to the court on the grounds that the company is unable to pay its debts. The petition is heard in court and an order is then made that the company is to be wound up.

The petition can be presented by a creditor, the BIS (Department for Business, Innovation and Skills) or the company itself. It is usually a creditor who presents the petition. This is the ultimate action which can be taken in pursuing a bad debt.

In the first instance the Official Receiver, who is an officer of the court, becomes the Liquidator. The Official Receiver has to make a decision whether to appoint a Licensed Insolvency Practitioner to take over the role of Liquidator.

Any disposal of the company's assets after the presentation of the petition is void. The advertising of a petition triggers the company’s bank accounts being frozen. Once the liquidation is commenced all legal action is stayed and no new legal action may be commenced. The liquidation brings an end to the powers of the directors and the Liquidator takes control of the company and its assets. All creditors will be contacted and asked to provide evidence of the amount which is due to them.

Dains has the necessary expertise to guide your company through these difficult steps. We’ll be right by your side throughout.



Dains Business Recovery Limited - Registered Company number 10115314. Registered office St John's Court, Wiltell Road, Lichfield WS14 9DS. Registered in England and Wales.

Martin FP Smith and Nicola J Meadows are licensed in the United Kingdom to act as Insolvency Practitioners by the Institute of Chartered Accountants in England and Wales.  Furthermore, they are both bound by the Insolvency Code of Ethics when carrying out all professional work relating to an insolvency appointment.  When acting as Receivers, Administrative Receivers or Administrators they act as agents only, without personal liability and when acting as Administrators, the affairs, business and property of the company are being managed by them.