Winding-Up Petitions and Coronavirus
Winding-up petitions-and-coronavirus COVID-19 pandemic continues to impact individuals and businesses throughout the United Kingdom.
For immediate help & free advice, please call 0800 612 5448 and speak with a member of ‘the team at HBG Advisory‘.
The UK government has suspended winding-up petitions and statutory demands until 30th June 2021.
A winding-up petition remains a serious robust method to collect unpaid debt, and can lead to compulsory liquidation of your company.
Can creditors of my business issue a Winding-up Petition?
Usually outside of the pandemic, Yes!
However, since 27th April 2020, the UK government suspended creditors issuing winding-up petitions and statutory demands due to the onset of the coronavirus COVID19 pandemic.
Currently, the suspension is due to expire on 30th June 2021.
Then Compulsory liquidations will commence. Please read ‘what is a compulsory liquidation‘, as you may ask ‘why choose a voluntary rather than compulsory liquidation’?
However, it is worth reading further ‘winding up petition from company creditors what then‘ for reference.
Winding-up-petitions-and-coronavirus – Does protection exist for my business?
In March 2020, the UK government introduced the Coronavirus Act 2020. The act protects UK businesses due to the current pandemic.
Importantly for commercial tenants, it is provided by means of a condition that those businesses unable to pay rent due directly to the pandemic would avoid eviction.
Further, the Corporate Insolvency and Governance Act 2020 stopped a creditor from issuing a winding-up petition unless the Coronavirus condition is fulfilled. That is, a creditor must believe that either:
- COVID-19 has not financially impacted the company.
- The debt applies even if COVID-19 had not had a financial impact on the company.
Before submitting a winding-up order!
The courts may issue a winding-up petition if the claimant can fulfil this condition, failing which, rejection.
Can my business creditors issue a CCJ during the pandemic?
Providing the creditor of your company is owed money, and you have not paid it. Then the creditor may apply for a County Court Judgement (CCJ) for payment. However, the debtor remains required within thirty days of the issue date of the judgement to pay the judgement in full to avoid the judgement noted on the credit file of the debtor.
The first lockdown instigated the suspension of visits by bailiffs. However, they were reinstated in August 2020, allowing visits and entry, provided the company had a CCJ registered against the limited company.
UK Government legislation to oppose the economic effects of the Coronavirus’ pandemic has meant winding up petitions, and statutory demands no longer may be issued until after 30th June 2021 (Subject to change). However, because creditors need to convince the courts, the coronavirus has not impacted the company financially, and the debt would still apply without it.
Notwithstanding, your business creditors can still take action to recover the debts owed.