Here at AABRS® , we are specialists in helping businesses deal with the threat of a Winding up Petition, one of the most serious which can affect any company. A winding-up petition is urgent and must not be ignored, but it does not start a seven-day clock. What matters is the timetable in the petition and the court documents. Unless the court directs otherwise, the petitioner cannot advertise the petition in the Gazette until seven business days after it is served on you, and advertisement is usually what causes the banks to freeze the company’s accounts. That window is your practical opportunity to act. Check the dates on your own papers and take advice immediately.
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Learn more about Winding up Petitions
Winding up Petition Overview
If you are struggling to pay your creditors in a timely manner, you may be presented with a Winding Up Petition. This is one of the most serious steps that HM Revenue & Customs or another creditor can take against your company to recover a debt. Creditors often petition after other recovery attempts fail, but the law does not require them to try anything else first. A creditor owed a debt that is due and not genuinely disputed can present a winding up petition if the company is unable to pay its debts, most often shown by a statutory demand for more than £750 left unpaid for three weeks.
What is the Winding up Petition Process?
Ordinarily, a winding up petition will have been preceded by a statutory demand which has not been satisfied or alternatively the creditor will have obtained a county court judgement against your company.
A processing server may be instructed by your creditor’s solicitor to serve the document, as from their perspective it is important that the proper insolvency rules have been complied with in relation to serving the petition.
In some circumstances, when directors are unable to be located, the processing server may attach the winding up petition on the door of the registered office address.
Once the winding up petition has been served, it is important as directors you call us as there are ramifications for you to consider and possible alternatives in order to prevent the winding up petition proceeding which will ultimately lead to your Company going into Compulsory Liquidation.
Once a winding up petition has been presented, any sale or transfer of company assets is at risk of being void if a winding up order is later made, unless the court validates it. Take advice before dealing with company assets, as a validation order from the court may be available.
What Happens to a Director after a Company has had a Winding up Order Issued Against it?
Having a winding up order issued against your company is very serious, and should be avoided wherever possible. However, if you do find yourself in the position where a winding up order has been issued to a company of which you are a director, it’s likely that you’ll have questions about what happens next and what it means for you as a director.
Winding up Orders
If your company has received a winding up petition from a creditor or HMRC, a court hearing date will be set to hear the petition. At the hearing, the judge will consider whether the debt is actually due and establish whether the company can pay. If the company is shown to be unable to pay its debts, the court will usually make a winding up order, which places the company into Compulsory Liquidation. The court can instead adjourn or dismiss the petition.