Are you uncertain of what to do because a winding-up petition has been filed against your company?
A winding-up petition is a legal action put forward by a creditor to the court against a company in order to settle debts.
If you fail to prevent a winding-up petition, it could eventually lead to your business collapsing and also prevent your business from trading. This petition could result in a court hearing; thus, forcing your company into compulsory liquidation.
Acting quickly is crucial
A winding-up petition represents the most serious legal action a creditor can take against a company to get what is owed; it is essential you act quickly if you have received a one.
If you don’t take the right steps after seven days, the company’s financial situation concerning the winding up petition will be made known to the public; resulting to the freezing of the company’s bank account.
When this happens, it disables your ability to trade, and also prevent any directors from disposing or borrowing against the company’s assets.
We can offer you or your company professional advice that will help in managing the situation as soon as possible. You can prevent your company from winding up and stop the petition if you take instant action against it.
What can I do if I’ve received a winding up petition?
You might be worried if a creditor has brought a winding-up petition against you; this could eventually force your company into liquidation.
However, there are actions available to you that can prevent this from happening, for example, showing your ability to settle the creditor.
Luckily, there are options available at your disposal if you act quick and contact one of our insolvency experts to assist you.
1. Pay the petition
You can prevent your company from winding up if your company has the means to settle the petitioning creditor; however, we strongly advise an insolvency specialist to handle this on your behalf.
You have to be very careful about the transfer of any company assets once a winding up petition has been issued to your company because a liquidator can recover these assets if a winding-up order is later obtained.
You can apply for an injunction if there is a legitimate dispute against the debt’s validity; however, this can only happen if you truly believe the petition is wrong. You would need assistance from a licensed insolvency practitioner to manage this situation.
Once the court agrees to adjourn, the insolvency practitioner now has time to detect how suitable your business is for administration, which may eventually lead to a company voluntary arrangement (CVA) or a prepacked sale. Doing this will prevent legal action against your business while restructuring possibilities are considered.
3. Contact a specialist insolvency firm
An insolvency form can negotiate with the petitioning creditor on your behalf. It is important a quick arrangement is made with the creditor if the company can pay the debt within a reasonable time-frame. A hearing petition will still hold even if the petitioning creditor accepts; however, the court will adjourn, giving the business more time to settle the debt.
What happens if I do nothing?
Your business will face serious problems if you fail to act when you receive a winding up petition. This petition will be made known to the public – published in the London Gazette – seven days after receiving the petition. All the company accounts will be frozen, and the company will be forced to stop trading once the public is aware.
There will be a hearing after 8-10 weeks if no action is taken to know if the court will issue a compulsory winding-up order. The company will be forced into compulsory liquidation when this happens. Thus, the directors cannot select a liquidator they desire, and it also prevents the company from trading again in the future.
You can lose your company without being able to choose a liquidator of choice if you do not act when a winding up petition is filed against your company.
Don’t hesitate to contact us (call us now on 01472 254914); we can possibly stop a compulsory liquidation from a winding-up order and also save your business under the right conditions.