When a company is unable to pay its debts then a Winding Up Order is made following the presentation of a Winding Up Petition. This starts the process of Winding Up.
Once a company is wound up it is in Compulsory Liquidation and either the Official Receiver or an Insolvency Practitioner will be appointed as Liquidator to Realise the company’s assets to attempt to make payment to the company’s creditors.
It is most commonly used by a creditor who is owed more than £750, but it can also be used by the secretary of state on public interest grounds or by shareholders who think it is just and equitable to wind up their company.
Unlike a Voluntary Liquidation, the directors and shareholders have no say in the initial choice of Liquidator.