Compulsory Liquidation

Compulsory liquidation is a legal process where a company's assets are sold off to pay its debts, initiated by a court order. This typically occurs when a company cannot pay its creditors and one or more creditors petition the court for the company to be liquidated. An official receiver or liquidator is appointed to oversee the sale of assets and distribution of proceeds to creditors. The process results in the company being dissolved, meaning it no longer legally exists. Compulsory liquidation is a last resort to settle debts when other options have been exhausted.