Winding up Petitions
If you are served with a winding up petition, this is a very serious step towards insolvency and requires immediate expert advice and guidance.
Winding Up Petitions and the Importance of Acting Fast?
When a Winding Up Petition is issued against a company, it signifies a serious financial challenge that requires immediate attention from the company directors.
This legal action is typically initiated by a creditor seeking to force the company into compulsory liquidation due to unpaid debts.
After filing, a petition will be advertised in the London Gazette, notifying all interested parties of pending insolvency. This will inevitably lead to bank accounts being frozen, severely impacting its ability to operate, rendering a potential spiral of further debt accumulation and failure to pay wages.
What is the process following a petition?
If a Winding Up Petition has been issued, you must act fast! Your business is at high risk of being forced into insolvency and entering liquidation.
Liquidation is a process where your business is forced to close and all assets are sold to pay creditors. This is a very serious step and could potentially lead to claims against the directors. We advise that you Contact Us immediately to prevent this from happening.
Once a winding up petition has been filed at court, you have a short window to address the issue before it is advertised in the London Gazette. The London Gazette is a publicly available document and will notify any interested party of your pending, potential insolvency.
Upon advertising, it is extremely likely that all bank accounts will be frozen and you will effectively cease to be able to trade and carry out day to day transactions. This can cause further debts to accumulate and restrict you from paying staff. Without the injection of cash from a third party, this could be critical.
You will be provided a hearing date from the court, with the intention to identify whether your company is in fact insolvent.
How can insolvency affect directors?
Once a company enters insolvency, the company and its transactions will be investigated to identify the reason for insolvency. There may often be legitimate reasons such as a downturn in the market of the loss of a large contract however; a directors conduct can be called into question if it is identified that the director has not acted in the best interest of the company and the failure is down to his/her wrongdoing.
A liquidator will review all transactions including but not limited to any debt taken into the company such as bounce back loans. If the liquidator is not satisfied that the company has been run appropriately, the directors may be referred to the Insolvency Service which can lead to a number of measures including Director Disqualification and/or a Fine.
If the liquidators suspect that a director acted unlawfully or inappropriately, they could make an application to the court to hold the director personally liable for the transactions
Facing a Winding Up Petition?
Contact Us Immediately on
03330 140313
Kingsley acted quickly and structured a solution
I was faced with not being able to trade anymore and had a number of creditors that were impacted.
Kingsley Legal Group acted quickly and built a tailored solution for a structured exit.
Act Fast for Immediate Advice.
A Winding Up Petition carries very serious consequences and delaying advice or not understanding the seriousness of this can be critical and could lead to individual claims against the directors.
Our team are supported by an approved panel of leading lawyers and insolvency specialists to act quickly, minimising risk and exposure to insolvency.
Contact us today by calling 03330 140313 or book an appointment with our team here
