A creditor may only issue a winding up petition if your company owes them more than £750 and only once an official payment demand has gone unheeded. In addition to this, the action may also be forced if a creditor has an existing unpaid CCJ against your business.
The conclusion of this process will see the closure of your company and it will be removed from the register after 2-3 months.
Should I just let my company go into Compulsory Liquidation?
If you are considering letting your company go into Compulsory Liquidation, there are some important things that you should be aware of.
Whilst it may seem the easy option, there could be some effects on you, including:
- professionals (e.g. banks, accountants and solicitors) often take a dim view on directors who let their company go into compulsory liquidation
- your future credit terms from lenders may be badly affected
- business people (including customers and suppliers) may see you as someone who has been complacent about your legal duties as a company director.
These effects may be felt when you put a company into a CVL. However, because you’re being pro-active and voluntarily putting your company into liquidation, in our experience the effects are likely to be far less with a CVL.
(If you’re not sure which type of liquidation is right for your situation, give us a call. We’ll give you free and confidential advice and help you select the best option.)