Winding up a company effectively ends the life of the company and puts it in to liquidation. Control passes to the liquidator who will undertake various functions including trying to get money back in to the company to pay creditors, together with investigating the directors' conduct.
Winding up a company is a process by which it is placed into compulsory liquidation. It is a process which ends the trading life of a company by a formal court order putting the company into the status of liquidation.
Compulsory liquidation is the form of liquidation which occurs after a winding up order is made by the court following the presentation of a winding up petition by a creditor of the company and the debt not being paid.
The liquidation process then involves the selling up of assets of the company by a liquidator and payment out of any money left over to the creditors of the company.
Following the winding up order, a liquidator will be appointed over the company (either a government appointed liquidator known as the Official Receiver or independent liquidator) and their job is twofold:
- to realise (sell) the assets of the company and make distributions to the creditors;
- to make enquiries into the running of the company and the conduct of those involved as directors or in the management of the company;
- if misconduct is found, then the liquidator can commence action against the former directors for recovery of money.
At Francis Wilks & Jones we have great experience in dealing with either the government appointment liquidator or independent liquidators. We are familiar with the process of what happens after a company is wound up by the court and can continue to press for action to be taken to recover outstanding debts and investigate the conduct of directors in a business.