For Immediate help 
When companies receive a winding-up petition it marks the start of a process which, if not dealt with swiftly, will ultimately result in the compulsory liquidation of the company and sale of its assets. Seeking professional advice fast is the best way to defend against the petition and maximise the chances of reaching a more favourable outcome.
A winding-up petition is a formal document issued by a company creditor in court, which requests a company to cease trading and enter compulsory liquidation.
A creditor must be owed at least £750 to apply for a winding-up petition; this is usually as a last resort, having already tried to reclaim their debt via a statutory demand or bailiff action.
Once a winding up petition is publicised this can often result in a company’s bank account being frozen, as soon as the bank becomes aware.
If a creditor has tried to recover a debt amicably and is threatening to apply for a winding-up petition but has not yet done so, the failure to take action will most likely result in them applying to the courts for a winding-up order. Once they have done this, the courts will set a time and date for a hearing of the petition and your creditor will serve the petition upon you, at least 14 days before the hearing. Your creditor will then advertise the petition in the London Gazette, which may encourage more of your creditors to endorse the petition and will prompt your bank to freeze your company account even if it is in credit.
If no action is taken at this point, the hearing of the petition will proceed and the winding-up order may be made. If the order is made your company will enter compulsory liquidation; this will result in the sale of company assets, the closure of the company and an investigation into the conduct of the directors and company practices by the Official Receiver.
If you have been threatened with or have already been issued a winding-up petition, it is imperative that independent professional advice is sought immediately. A delay in taking action to deal with the situation could result in a far worse outcome.
If the debt is disputed, the court and the petitioning creditor will need to be informed. If the dispute has not been resolved by the petition hearing date the court will give guidelines about how the issue will be dealt with, but could make the order to wind-up the company.
If the debt is not disputed and the debt can be repaid in a reasonable time-frame, arrangements need to be made with the petitioning creditor in the first instance. If the creditor accepts payment terms then the hearing of the petition will still take place, but the court will adjourn the petition to give the company time to pay.
If no action is taken, it is highly likely the court will grant a compulsory winding-up order. This action will result in the company being placed into compulsory liquidation. The official receiver will become the liquidator, but may choose to appoint an insolvency practitioner to act as liquidator.
The directors will not be able to nominate their preferred liquidator unless they are a creditor of the company.
The official receiver has a duty to investigate the cause of the company’s failure and to investigate the actions of the directors. The company will be forced to stop trading, staff will be made redundant and the assets (if there are any) will be sold.
If a director disputes a petition and the petitioning creditor refuses to withdraw, a defence will need to be lodged in court at least five days prior to the hearing. The defence will need to include details of the reasons for the dispute and some evidence that will support the defence of the petition. If the company agrees with part of the claim, this will need to be dealt with separately and ideally paid in full, with costs, before the hearing.
If a defence has been submitted prior to the first hearing, the judge will listen to reasons for the defence and assess whether to grant an adjournment of the hearing to give the two parties a chance to resolve the dispute before the second hearing.
If you want to rescue the company or save the business, it is always better to do this when the petition has only been threatened as the options available are limited and more complex to implement if the petition has been issued. However, whether a winding-up petition has just been threatened or has been issued, it is crucial that you seek professional advice quickly. The first step is to get in touch with our insolvency team who will discuss your company’s financial position and the options available. This will be done initially over the telephone, with a more in-depth assessment being conducted in a face-to-face consultation at a later date. During this meeting we will be able to give you an idea of how viable the future of the company is and an appropriate course of action can be decided upon.
When a decision is made to have us act on your behalf, the directors will need to do this by board resolution. We can supply the required documentation if you are unsure how to do this.
Once instructed our professional team will work with you to formulate a plan of action that will best suit your aims and objectives. The options that are available will be wholly dependent on what stage the winding-up petition is at and whether or not the petition has been threatened or has been issued. There are many more options available when the petition has only been threatened, so it is imperative for directors to seek help at the earliest opportunity.
As qualified, licensed and experienced Insolvency Practitioners, we can help by:
These actions will make you less susceptible to financial problems, improve cash flow and enable you to continue building a profitable business.
For peace of mind, why not ask for our advice?
Request a confidential consultation with one of our insolvency specialists today.
If a director disputes a petition and the petitioning creditor refuses to withdraw, a defence will need to be lodged in court at least five days prior to the hearing. The defence will need to include details of the reasons for the dispute and some evidence that will support the defence of the petition. If the company agrees with part of the claim, this will need to be dealt with separately and ideally paid in full, with costs, before the hearing.
If a defence has been submitted prior to the first hearing, the judge will listen to reasons for the defence and assess whether to grant an adjournment of the hearing to give the two parties a chance to resolve the dispute before the second hearing.
If you want to rescue the company or save the business, it is always better to do this when the petition has only been threatened as the options available are limited and more complex to implement if the petition has been issued. However, whether a winding-up petition has just been threatened or has been issued, it is crucial that you seek professional advice quickly. The first step is to get in touch with our insolvency team who will discuss your company’s financial position and the options available. This will be done initially over the telephone, with a more in-depth assessment being conducted in a face-to-face consultation at a later date. During this meeting we will be able to give you an idea of how viable the future of the company is and an appropriate course of action can be decided upon.
When a decision is made to have us act on your behalf, the directors will need to do this by board resolution. We can supply the required documentation if you are unsure how to do this.
Once instructed our professional team will work with you to formulate a plan of action that will best suit your aims and objectives. The options that are available will be wholly dependent on what stage the winding-up petition is at and whether or not the petition has been threatened or has been issued. There are many more options available when the petition has only been threatened, so it is imperative for directors to seek help at the earliest opportunity.
As qualified, licensed and experienced Insolvency Practitioners, we can help by:
These actions will make you less susceptible to financial problems, improve cash flow and enable you to continue building a profitable business.
For peace of mind, why not ask for our advice?
Request a confidential consultation with one of our insolvency specialists today.
