Companies go into compulsory liquidation when they become insolvent - that is, unable to pay their debts, or with assets worth less than their debts - and no arrangement has been agreed with creditors.
If an insolvent company owes you money, you can ask the High Court to make a compulsory winding-up order against it. Generally, this only happens after you have exhausted all other ways of recovering your money.
You must be owed at least £5000, without dispute, before you can ask for a winding-up order. Orders can be requested either by other businesses or individuals.
This guide explains the circumstances under which compulsory winding-up orders can be made, and creditors can attempt to recover their money through the Courts.