Received a Winding Up Petition? We can help.
What is a 'Winding up petiton'?
A winding up petition is the start of a process which if ignored leads to the Compulsory Liquidation of a limited company (this also applies to LLPs).
Winding up petition? – You need to ACT NOW before the petition is advertised:
- The company’s bank accounts / borrowing facilities will be immediately frozen. This will effectively cause the business to cease trading unless it has sufficient cash to continue
- On learning of the winding up petition suppliers are likely to put the company “on stop”
- Creditors other than the petitioning creditor can “piggyback” the petition (ie they can add their debt onto the petition)
- If no action is taken the court will eventually issue a winding up order (see below)
Effects of a winding up order
- Control of the business is removed from the directors and vested in the Official Receiver
- The Official Receiver will usually act as liquidator
- The affairs of the company will normally be investigated by the Official Receiver
If you are a company director and your company is issued with a winding up petition, what can you do?
- Seek IMMEDIATE professional advice from a Licensed Insolvency Practitioner Contact us
- This is particularly important if you have aspirations of salvaging part or all of the business
- One key difference between a Compulsory Liquidation and a Creditors Voluntary Liquidation is the ability to acquire assets and trade of the company may be possible through a Creditors Voluntary Liquidation but is unlikely to be possible in a Compulsory Liquidation.
