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Received a Winding Up Petition?

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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).

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.

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

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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.

 

 

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