Voluntary Liquidation is where the directors of a company, take the difficult decision following comprehensive insolvency advice, to instruct a licensed insolvency practitioner to liquidate the company. The liquidator’s duties are to collect in the assets of the company and make the necessary distributions to the creditors. This is a well trodden path in dealing with insolvent companies.
In a Compulsory Liquidation scenario a creditor issues a petition through the Court to have the company wound up, and the directors are forced down the route of liquidation if deemed fit by the court.