Compulsory liquidation
Compulsory liquidation is when a court informs a company that it is insolvent and must file for liquidation. A compulsory liquidation court order is the last stage of the process, the first is where a creditor issues what is known as a winding up petition against a company for unpaid debts. This is an application to the court to close or ‘wind up’ a company if it cannot pay its debts. There are different rules on winding up a company in Scotland.
In England and Wales to wind up a company the creditor must: "be owed £750 or more and be able to prove that the company cannot pay"
Specific forms must be completed and sent to the right court to apply to wind up a company. If successful: "the company assets are sold, any legal disputes are settled, the company collects money it’s owed (and) funds are paid to you and any other creditors'
This may lead to the creditor receiving all (including fees), some or none of the money owed, it is a major action against a company and there are other routes to recovering owed money, best might be to seek advise from debt specialist (or solicitor) to help recover debts.
Fees for a winding up petition in January 2025 were court fees at £332 and a petition deposit (to manage the ‘winding-up’) of £2,600.
For further information visit https://www.gov.uk/wind-up-a-company-that-owes-you-money and for Scotland visit different rules.
[edit] Related articles on Designing Buildings
- Business interruption cover under COVID-19.
- Campaign for cash retentions reform.
- Carillion.
- Cash flow statement.
- Contract claims.
- Fair payment practices.
- Insolvency Act 1986 - Use of Prohibited Names.
- Insolvency in the construction industry.
- ISG administration, October support update.
- ISG files for administration.
- Liens.
- Liquidation in the construction industry.
- New regulations on late payment.
- Profitability.
- Prompt payment.
- Remedies for late payment.
- Resolution planning.
- Scheme for construction contracts.
- Solvency.
- Support for ISG contractors, companies and employees.
- The Late Payment of Commercial Debts Regulations 2013.
Featured articles and news
National Apprenticeship Week 2026, 9-15 Feb
Shining a light on the positive impacts for businesses their apprentices and the wider economy alike.
Applications and benefits of acoustic flooring
From commercial to retail.
From solid to sprung and ribbed to raised.
Strengthening industry collaboration in Hong Kong
Hong Kong Institute of Construction and The Chartered Institute of Building sign Memorandum of Understanding.
A detailed description fron the experts at Cornish Lime.
IHBC planning for growth with corporate plan development
Grow with the Institute by volunteering and CP25 consultation.
Connecting ambition and action for designers and specifiers.
Electrical skills gap deepens as apprenticeship starts fall despite surging demand says ECA.
Built environment bodies deepen joint action on EDI
B.E.Inclusive initiative agree next phase of joint equity, diversity and inclusion (EDI) action plan.
Recognising culture as key to sustainable economic growth
Creative UK Provocation paper: Culture as Growth Infrastructure.
Futurebuild and UK Construction Week London Unite
Creating the UK’s Built Environment Super Event and over 25 other key partnerships.
Welsh and Scottish 2026 elections
Manifestos for the built environment for upcoming same May day elections.
Advancing BIM education with a competency framework
“We don’t need people who can just draw in 3D. We need people who can think in data.”
Guidance notes to prepare for April ERA changes
From the Electrical Contractors' Association Employee Relations team.
Significant changes to be seen from the new ERA in 2026 and 2027, starting on 6 April 2026.
First aid in the modern workplace with St John Ambulance.
Solar panels, pitched roofs and risk of fire spread
60% increase in solar panel fires prompts tests and installation warnings.
Modernising heat networks with Heat interface unit
Why HIUs hold the key to efficiency upgrades.