Compulsory liquidation is a formal insolvency procedure which results in a company being forcibly shutdown.
The court will issue a Winding Up Order if the company is unable to pay its debts and the assets of the company are realised and distributed to the company's creditors.
The process starts when a winding-up petition is presented at court. During the court hearing a judge decides whether it is appropriate to make a winding-up order. The most common reason for a winding-up order is that the company is insolvent. At the end of the liquidation, the company is dissolved.