Winding-Up Petition from Company Creditors

Winding-up petition from company creditors. Written by John A Waller, Consultant Reviewed July 19th,2024.

Why might you have been served a winding-up petition, and what happens now?

A winding-up petition from company creditors remains a legal notice filed by a creditor at a court. This means a creditor petitioned the court because they are owed £750 or more and have remained outstanding for 21 days or more. The request commences the liquidation process via ‘compulsory liquidation‘. Directors face exposure to personal liability issues at this point, so act swiftly.

A winding- petition from company creditors remains the most advanced procedure available 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 practised its best efforts to:

  • Pay on the due date;
  • however, debtors have paid sluggishly;
  • And turnover is less than budgeted, affecting the company’s cash flow.

The procedure remains a powerful method of resolving matters. Creditors eventually lose patience. However, it may become a personal issue, so the issuing of a petition remains out of contempt.

Therefore, it is imperative to swiftly seek help from an Insolvency Practitioner, as found at ‘the team at HBG Advisory‘.

Trading when my business can’t pay creditors remains illegal as a limited company.

Creditor Moves to Wind your company up.

Suppose your company receives a winding-up petition from company creditors. Therefore, they are usually focused on recovering money owed to them by your company or closing it down for good.

Directors must note the law when making payments once they receive a petition. However, if the company enters liquidation, payments issued while receiving the petition remain void. Therefore, no payments are issued without a validation order.

So, as a director, ensure that you act swiftly and contact a licensed Insolvency Practitioner. Time is of the essence.

For further reading on why your company received a winding-up order, please view’ my company received a winding-up petition

OPTIONS EXIST TO HELP YOU IF YOU TAKE ACTION!

Cost 

However, the cost of issuing a winding-up petition ranges between £400 and £800. Once issued, the court requires a court deposit of £1,600 and £280 for filing costs.

Winding-Up Petition from Company Creditors – 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 commence winding your company up. (Often leverage to compel the creditor to pay, but not always.) Note, though, that this action should be considered. 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 commence 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 Petition and What is Compulsory Liquidation?

For further support and advice. Please get in touch with HBG Advisory on 0330 056 3120

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