If you fail to pay a debt of over £750, you may find that one of your creditors decides to send a Winding Up Petition to the court.
If successful, the Winding Up Petition will result in the court issuing a Winding Up Order which means your company will be forced into compulsory liquidation.
A winding up petition is the most serious action that can be taken against you as a business. This is a critical situation with severe consequences that cannot be ignored. Despite this though, it is also often the last resort taken by a creditor demanding payment, due to the associated legal fees.
If you find yourself in this situation it is extremely important that you understand how a winding up petition works and what it could mean for your business.
The Next Logical Step
Often, a winding up procedure is the next logical step for creditors that have failed to make contact with you on several different occasions. Even if they have been in contact in the past, if your creditors have little confidence in your ability to make payments they will pursue a winding up petition. This will prevent your business from selling any assets and your accounts will be frozen.
Professional Help and Legal Advice
Dealing with a winding up petition can be a difficult time, but failing to deal with it quickly and efficiently can lead it to spiral out of control. If one of your creditors issues a winding up petition, the rest of your creditors will be likely to intensify their demands also. So the pressure is only set to increase as time goes on.
Whether or not the winding up petition is successful, it is vital that you seek professional help and legal advice throughout the whole procedure. If the petition is successful your company will be wound up to pay off unpaid debts; this can be a long and complex process and therefore expert guidance is necessary. Contact one of our advisors for more help and information.
Can it Be Avoided?
In some certain circumstances, a winding up petition can be avoided by exercising the option of a Creditors Voluntary Liquidation (CVL). This option carries with it much less stigma for company directors.
Find out if you can avoid a winding up petition by contacting the team at Clarke Bell today.