A solvent company can enter a Members' Voluntary Liquidation (MVL) by resolving to do and appointing a liquidator. The liquidator's role is to realise the assets of the company for distribution to the shareholders.
Also known as CVL, this is when the Directors decide that the Company can no longer continue and place it into liquidation before creditors do. The assets are then realised for the benefit of all creditors.
A compulsory liquidation occurs when one (or more) of the creditors petitions to the court to liquidate the company. The aim is that all of the assets can be sold and the proceeds used to repay outstanding debts.