A winding up petition is significant legal action that can jeopardise company continuity. Left unchecked, the outcome of a winding up petition is compulsory liquidation. A licensed insolvency practitioner like ourselves, can help to start or urgently stop a winding up petition.
The winding up of a company:
Before a winding up petition can be issued a creditor that is owed £750 upwards may send a payment demand letter or serve a statutory demand asking for repayment of the company debt. If the company debt remains unpaid and the creditor believes the company insolvent, there are then grounds for a winding up petition and subsequent winding up order. In closing a company (liquidation), creditors have the chance to recover their debt as any assets are sold and the proceeds distributed.
Winding up petition options / how to stop a winding up petition:
Explore the following winding up petition options; having first bought some time with a court adjournment (call 0121 201 1720).
- Pay the debt in full. Asset finance may be an option (ask us)
- Agree a time to pay plan with the creditor:
- Dispute the winding up petition
- Go into administration whilst re-structuring is organised.
- A creditors voluntary liquidation.
The options available and consequences of a winding up petition very much depend upon the speed with which action is taken and the company's circumstances. As part of the winding up process, bank accounts will likely be frozen once a petition is advertised in the London Gazette to protect unsecured creditors.