Winding Up Petition from Company Creditors. What then?
Why might you have been served a winding-up petition, and what happens now?
A winding-up petition remains a legal notice filed by a creditor at a court. Meaning a creditor petitioned to the court, as they are owed £750 or more and have remained outstanding 21 days or more. This means the request commences the process of a liquidation via ‘compulsory liquidation‘. Directors may be exposed to personal liability issues at this point, so act swiftly.
Being the most advanced procedure that can be taken against your company, and a statutory demand often leads it. So what can be done about it? Usually, trade relationships have been strained, and trust has been lost. However, your company has practised the best efforts to:
- Pay on the due date;
- Though your debtors have paid sluggish;
- And turnover less than budgeted, affecting the cash flow of the company.
The procedure remains a powerful method of bringing matters to a head. Creditors eventually lost patience. However, it all may become a personal issue, and therefore, the issuing of a petition is done out of contempt.
Therefore, it is imperative to seek help from an Insolvency Practitioner swiftly! Like ‘the team at HBG Advisory‘.
Trading when my business can’t pay its creditors is illegal if a limited company.
Creditor Moves to Wind your company up
Suppose a creditor then moves to wind your company up. In that case, they are therefore usually focused on recovering money owed to them by your company or closing it down for good.
Directors must note the law when wishing to make payments once in receipt of a petition. If the company enters liquidation, payments issued while in receipt of the petition will be voided. Therefore, no payments may be issued without a validation order.
So, ensure as a director, you, therefore, act swiftly and contact a licensed Insolvency Practitioner. Time is of the essence.
For further reading on why your company has received a winding-up order, please view’my company has received a winding up petition‘
OPTIONS EXIST TO HELP YOU IF YOU TAKE ACTION!
To issue a winding-up petition, however, ranges between £400 and £800. Once issued, the court will therefore require a court deposit of £1,600 and £280 for filing costs.
The Winding Up Petition Procedure
Once your company creditor reaches the point of no longer believing they can chase outstanding money further. Usually, they then turn to the law of the land and request assistance from a Solicitor. Then they will commence winding your company up. (Often leverage to compel the creditor pay, but not always.) Note, though, to consider this action. Your creditor must owe you £750 or more.
Applications (petitions) remain directed to the high court. The court then considers whether a winding-up order should be commenced on the validity and value of the claim. Do not ignore documents regarding this grave matter.
For further reading, please view Dealing with a Winding Up Petitionand what is a Compulsory Liquidation?
For further support and advice. Please contact HBG Advisory on: