Compulsory Liquidation is the most serious insolvency procedure that an insolvent company may find itself facing. It occurs when a creditor who is owed at £750 or more issues a winding up petition against the company and a winding up order is issued by the Courts, that will then appoint a liquidator to begin the liquidation process.
Liquidation will involve the company ceasing to trade, and the appointed Liquidator will carry out his responsibilities under the Insolvency Rules. The Liquidator will sell the assets, investigate the affairs of the company and if it is found that the directors did not act in the best interests of creditors, they may be guilty of wrongful trading. In which case evidence will be gathered and passed- on to the insolvency service who may seek to disqualify or prosecute the director(s) in question.
Once the winding up order has been issued by the courts and a liquidator has been appointed there is very little that can be done to save the company. The liquidator will proceed to sell the company’s assets and ultimately the company will cease to exist.
It is therefore vitally important to contact Bhardwaj Limited if a creditor has threatened to issue a winding up petition or if one has already been issued, while there is still time to consider other options.