Compulsory liquidation occurs when a creditor attempts to force your company out of business in order to recover any debts owed to them. In order for the process to begin, the creditor(s) in question must first issue a winding up petition to the court. This is the most serious and troublesome insolvency procedure and is subject to the rules and regulations as specified by the Insolvency Act 1986.
If your creditors are successful in their petition, your company will be forced into liquidation and all of your company assets will be sold in order to raise money to repay the outstanding debts.