Stopping a Winding-up order.

Dealing with a Winding Up Petition

Same Day - Initial "FREE" advice -In total Privacy online - Confidentiality Assured

Covid-19 affecting your business? Same-day Rescue & Recovery Options Available.

Free Director Advice & Support TODAY.

Our Licensed Insolvency Practitioners offer Confidential Safe Advice online.

Book a Virtual Meeting - Free Confidential Advice
If you need help understanding the best way forward for your company, we can provide confidential free initial advice. You can book a free virtual meeting or call us on 0800 612 5448.

Dealing with a Winding Up Petition?

Dealing with a Winding Up Petition – How?

Whenever dealing with a winding-up petition, it is essential to act FAST!

A winding-up order focuses the debtor on dealing with a winding-up petition, as it is time-sensitive. It is an insolvency tool applied by creditors to force payment of the outstanding debt by a company. It is the strongest action a creditor can take.

This process is the last opportunity for the company to petition the court to have the company liquidated.

Meet The Team at HBG Advisory.

What happens when HMRC wind up a company?

What happens when a winding up order is made?

Once the court has made the winding up order, the Official Receiver is appointed to commence liquidating assets of the company, so they can repay HMRC along with creditors of the company. The directors of the company may face a directors ban of up to fifteen years.

How to stop a winding up petition?

Dealing With A Winding Up Petition – Winding up Petition

  1. It is important to note. Dealing with a winding up petition is not like any other legal action. Time is of the essence.
  2. Creditor issues a 21-day Statutory Demand for payment.
  3. If unpaid and no viable hope of an agreed repayment plan, the petitioner arranges to engage a solicitor to execute the application for winding up your company.
  4. The High Court then receives the petition, as does your company at its registered address. A process server delivers the petition.
  5. The date for the court hearing set 8-10 weeks following the petition issue.
  6. Speed then is the priority; otherwise, your company does not avoid “Compulsory Liquidation”. Seven days after the date the petition is served, a hearing date then advertised in the London Gazette. Therefore, your company position is out, in the public domain, and with open public knowledge of your company’s predicament.
  7. Your bank then views the advert in the London Gazette, then freezes your account, preventing further trade, without the expressed permission of the courts.
  8. You may though still seek an adjournment via applying for an injunction. However, the chances of success remain limited.
  9. Failure by your company to take action results in a Winding-Up Order granted by the court. Therefore, you lose control of the situation.
  10. An appointed Liquidator commences investigations into the director’s conduct and accusations, wrongful trading, and any other allegations regarding the company’s running.

Do you have to Serve a Statutory Demand Before a Winding-up Petition?

Though not obligatory to serve a statutory demand when filing a winding-up petition.

Usually, the court requires proof that formal demand for payment has been ignored or unpaid. The wording is in the Insolvency Act 1986, Section 123.
A demand letter posted by registered mail is therefore evidence.

Compulsory Liquidation & Winding Up Petition

Compulsory Liquidation & Winding Up Petion are usually combined. It is the winding up of a company via the courts by a winding-up petition. Upon successful application, the company Compulsory Liquidated. The Official Receiver is then appointed liquidator.

Dealing With A Winding Up Petition – What is Compulsory Liquidation?

To place a company into “Compulsory Liquidation”, one or more of the company’s creditors must apply to the courts for a Winding Up Order. Once in “Compulsory Liquidation”, assets sold. The proceeds then used to repay outstanding debts, the company owes.

A company can only receive a “Winding-Up order” from a creditor if they owe more than £750 and have failed to pay. Failure to pay can be either an unpaid County Court Judgement or outstanding formal demand.

If advertised, then

The conclusion of “Compulsory Liquidation” is the dissolution of the business. The company ceases to exist and struck off Companies House register within three months of the conclusion of the “Liquidation”.

Can I Stop A Winding Up Petition?

Options available to a company facing “Compulsory Liquidation” and Winding-Up Petition vary depending on how far you are in the process. If HMRC chases you, make every effort to arrange an HMRC time to pay for any taxes due, rather than be wound up. The only way to definitively stop “Compulsory Liquidation” or a “Winding-Up Petition” to satisfy the outstanding amount to the Creditor in full, coming to satisfactory payment terms for both parties, or by placing the company into a formal Insolvency process, like an “Administration“.

Why serve a winding up petition when the company has no assets it owns?

The directors often ask us why do creditors serve a winding-up petition on companies with no assets? Creditors do, however, wish to liquidate companies with no assets nor liquid funds. When a company is in financial difficulty and has no assets nor cash, why go through the expense and time to liquidate it?. Petitioning to wind up a company is not cheap.

So logically. Why does it?

The largest creditor in the UK to issue winding-up petitions remains the HMRC. When giving a petition, they do not consider assets as debt, unpaid.

The HMRC has a public role in enforcing penalties against companies failing to pay their taxes due on time. Never assume, because your company has no assets, that creditors do not petition.

May My Company’s Bank Account Be Frozen When A Winding Up Petition Is Issued against My Company?

The straightforward answer, yes.

If your winding-up petition has been advertised in the Gazette, the bank will likely make a move.
The freezing of your company’s bank account has a terrible outcome for your company if this is allowed to happen.
It would help if you considered a time lag from issuing the winding-up petition and your company’s bank account frozen. Therefore, if you plan to pay or dispute the debt associated with the petition, you must act immediately and seek advice now.

Insolvency Options?

Dependent on how far along the process your company is, options exist to assist:

Once the winding-up petition process has been finalised and approved, the company is then placed into “Compulsory Liquidation”. Usually, the “Official Receiver” appointed Liquidator of the company.

If the official receiver deems it necessary, or creditors vote to appoint a third-party Liquidator. A “Licensed Insolvency Practitioner” replaces the Official Receiver as liquidator. Upon appointment, they must comply with the Insolvency Act 1986 and comply with their duties as “liquidator”.

The Liquidators Duties?

The Liquidator statutory duties to abide by in the course of a Liquidation. They include:-

  • Maximising the realisation of the assets in the company for the benefit of the company’s creditors.
  • Report to Creditors the progress of the Liquidation.
  • When appropriate, seeking creditor approval for certain actions in the liquidation.
  • The agreement of Creditor claims.
  • Distribution to Creditors of funds available realised by the Liquidation.
  • The investigation into the conduct of the directors, before the Liquidator, appointed.

Compulsory Liquidation & Winding Up Order during COVID-19?

HBG Advisory (insolvency practice) helping businesses in the UK, having been impacted by the COVID19 pandemic. Through the UK, we help with your “Compulsory Liquidation” & “Winding-Up Petition” with no obligation and expert advice from our many experienced partners and consultants. Please speak with someone at HBG Advisory TODAY.

For additional in-depth reading, please refer to the DLA piper web page.

Bailiffs – Rights & Powers When Dealing With Debt Of A Limited Business

A limited company remains a separate legal entity to the company directors. Therefore, when a bailiff or enforcement officer attempts to remove goods on behalf of a creditor, goods only belonging to the company may be removed, not those of an individual or officers of the company.

Bailiffs appointed to collect a debt from your limited company, creditors usually attend when you cannot enter an agreement with a creditor.

Often this can turn out to be a stressful event for company directors. Therefore, it is essential to understand the Bailiff’s authority and power. HBG Advisory needs to be consulted for advice before bailiff action to protect all party interests.

Support Is Just A Call Away
Business recovery for distressed directors and limited companies.
Stopping a Winding-up order.
Stopping a Winding-up order.
Stopping a Winding-up order.
Stopping a Winding-up order.
Choose of IP important to your company
Check out track records first

    Get Help Today
    1. Name: (*)
    2. Company Name:
    3. Telephone: (*)
    4. Email:
    5. Message:

    *Required Fields


    0800 612 5448

    Further Reading