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Written by Keith Tully
Businesses that have been issued with a winding up petition often feel there is no way out but to allow their assets to be liquidated and their business forced into compulsory liquidation. There may be an alternative so it is essential to seek help and advice immediately. Some winding up petitions indeed maybe be stopped if actioned early enough!
A great number of business owners and directors in the UK seem to have a bit of confusion as to just what a winding up order or a winding up petition actually is. The problem appears to be in whether or not a company can voluntarily make an application to be stricken from the books or if a winding up petition can be requested by a third party. In fact, both of those can be the case and it is sometimes even possible to stop a winding up petition, even one petitioned by a creditor. Real Business Rescue has helped hundreds of UK businesses put a halt to a winding up order but each case is individual and there are variables which must be considered.
Voluntary Winding Up Petition
If a company wishes to cease trading and be stricken from the books, it is imperative to follow the directives of the Companies Act 2006. There are strict regulations in regards to how and when a business can request to be dissolved and these are summarised under four main conditions. All of these conditions must be met within the three months prior to submitting a voluntary winding up application:
A company does not have to be solvent to make application to be wound up, but the paperwork is very precise and certain documents must be included with the application. The application is submitted with appropriate fees to the Registrar. Because laws are quite strict, many businesses find that they require the services of a licensed insolvency practitioner in order meet all the requirements and avoid being penalised.
The Voluntary Winding Up Process
When questioning how to wind up a company, the thing to understand is the process. Of course it all begins with making a petition to the Registrar. This application must hold the signatures of a majority of the company’s directors. Within the first 7 days of submitting the application, a copy must be distributed to all interested parties, including but not limited to:
Depending on which jurisdiction the company is in, a notice will be placed in the London, Belfast or Edinburgh Gazette. There must be a minimum of a three months notice that the company intends to wind up/dissolve and be stricken from the books. This will allow time for any interested party to make an objection.
When Creditors Seek a Winding Up Petition/Order
One thing to realise when you have received a winding up petition from creditors is that this was no easy decision for them to make. It is quite a serious matter that will eventually cost a great deal of money. Of course your creditor, whether another company or the government (unpaid taxes) petitions for winding up, it is because they have lost faith in your ability to pay your debts which have accumulated. For example, the cost of the winding up petition itself can be anywhere from £300 to in the vicinity of £800. That is quite a tidy sum just for the petition, so you know they mean business and are seeking to liquidate assets to recoup their expenses plus what you already owe them. Then there are filing fees, court costs and other expenses costing well over £2,000.
Stopping or Adjourning a Winding Up Order
Even after winding up a business has been ordered by the court, Real Business Rescue can often help to stop the order or get an adjournment. It is possible to negotiate a Creditors Voluntary Arrangement at times amongst other recovery strategies which are preferable to all concerned. The creditor will always have a fear that there will not be enough from liquidating assets to pay what is owed them so many times they are willing to enter into an agreement. A winding up order is the final step to dissolving a company which is why it is prudent to seek help, support or advice from licensed professionals. If you want to continue trading and believe your company can be viable in the future our team will make every effort to stop the winding up of your business. With a long track record behind us, it can be done!
It is difficult enough to understand all the rules and regulations of a winding up petition or order let alone to try to make sense of the process and procedure. This is why Real Business Rescue has a team that specialise in this area of business recovery. It should be emphasized that being issued a winding up order is very, very serious. It can lead to a total dissolution of your company that has so much time, effort and money invested in it.
Whether you are actively seeking to voluntarily wind up your company or a winding up order has been issued against your business by a creditor, let Real Business Rescue discuss your options with you. It pays to have a professional on your side because one false move can be financially devastating as the penalties are known to be severe. Call us for help, advice and expert service on business winding up petitions and orders. There is an answer for any problem and we are expert in seeking solutions.Linked In Google+ Twitter