Updated: 5th February 2020
If you’re a member/partner in a limited liability partnership (LLP) and your business debts have led to you being served a winding-up petition, our experienced business rescue specialists can help – although you must act immediately.
A winding-up petition – also known as compulsory liquidation – is essentially the ‘final straw’ for disgruntled creditors who have been moved to action by continual non-payment of debts. The most common business creditor is HMRC for unpaid tax. Some creditors may petition purely as a scare tactic whilst others may seriously mean business – of course, with HMRC, it will be the latter.
A creditor can petition the court for winding-up if they are owed at least £750, stating that the debtor is unable to pay its debts as and when they fall due. The courts will give the debtor seven days to answer the petition or settle its arrears but after this period, the insolvency of the debtor will be publicised in the London Gazette as an advertisement to other creditors and stakeholders (if any). This is a hugely serious step and also means your business bank account will be frozen – rendering the business unable to trade and pay its staff.
Once the winding-up petition has been received, you have a short period of time before an Official Receiver (OR) is appointed and you will need a licensed insolvency practitioner to talk you through your options at this stage. If you are unable to pay the debts in full, your LLP would still have a small number of options available, such as:
Once the courts have heard the winding-up petition, the Official Receiver or insolvency practitioner will be in charge of liquidating the firm and at this point, all control of the business is released. The Official Receiver’s obligation will be to find funds to pay creditors through the sale of assets within the firm, and also handle all legal issues and eventually the closure of the business.
If you are a partner within an LLP that is now insolvent, it is important to remember that you are not necessarily personally liable for outstanding debts that the business may have incurred. However, as part of the investigation into the failure of the company, which is held by the Official Receiver, you might be held personally liable should it be shown that you acted wrongfully. Since these statutes are not as clearly defined as one might think, contact Real Business Rescue and we can talk you through the situation and help abate any confusion.
If you are facing a compulsory liquidation notice, you really have no time to waste. Before you know it, the operations of your business may be totally out of your hands. At Real Business Rescue, we are vastly experienced at fielding frantic calls from directors and partners and are, more often than not, able to bring about a satisfactory resolution. Our commitment to all directors and partners is offered through a network of 78 UK offices, or one of our licensed insolvency practitioners could be able to come and visit you. Seek the help of the UK’s leading corporate insolvency firm, Real Business Rescue, by calling us today.