|What is a Winding Up Petition?||
How to stop a Winding Up Petition
The process for stopping a winding Up Petition is fairly straight forward. First, however, a brief recap on what a winding up petition is and what it could mean to you:
If a limited liability company, listed or not, cannot pay its bills then there may come a time when creditors decide enough is enough and take steps to have the company liquidated. The first step to achieving that is for one or more creditors, or even the shareholders, to submit a 'Winding Up Petition' to a High Court, or in some cases a County Court. In fact, any individual owed more than £750 can do this individually.
Unless stopped, this winding up petition will spell the death of the company as you know it, and while it may be sold on to be resurrected, it will nevertheless have first to be liquidated to pay the creditors what they are owed.
The resurrection under another name, and still with the same directors and shareholders who purchased it from the receivers, is known colloquially as a Phoenix - a company resurrected from the ashes of the old business under a new board of directors who could be exactly the same as the previous board. This is legal.
However, no board would ever prefer to have this happen rather than being able to stop a winding up petition, so how can it be done? Here is how:
1. Pay the entire debt
2. Pay off all your debts
3. Come to a repayment agreement.
4. Request the court to put on hold
5. Let the professionals sort it for you
There is no getting away from the fact that your business has assets, then these will be realized to offer payment to your creditors in a hierarchy ranging from the liquidator's fee first, any secured debts second and so on down the line.
Meanwhile, your employees are being made redundant with a minimal payment of £800 and transactions on the shares of your company are frozen. Then your assets will be put up for sale, and all you can be thankful is that because yours is a limited liability company, they cannot seize your personal earning or your property and other assets.
So, if you know how to stop a winding up petition you certainly should, because the consequences are dire for your employees and shareholders. However, if you cannot meet any of the terms required to achieve this, then there is nothing left for you - except perhaps for you and your shareholders to raise enough money to buy your company from the liquidator. Professional help looks to be your best answer.
There are ways how to stop a winding up petition, but you have to learn them and then start planning long before the petition itself is drawn up. You must either pay off your creditors or come to a repayment arrangement with them - but a professional can help you. That is the long and the short of it!
Pre Pack Administration
Dave Parker on Jan 08.
"Fantastic service. They really knew their stuff and advised on the best possible solution for us. We are now back on track"
|How to stop a Winding Up Petition|
|When to use one|
|How is a Company wound up?|
|What happens to the directors?|
|What happens to the Employees?|
|What is a Pre-Pack Asministration?|