We’ve been unable to pay one of our creditors for the past couple months and now they are claiming that they will wind up our company if we do not pay by the next due date. We’ve heard that company administration can halt any legal actions taken against a company. Does this mean it could stop liquidation? What can be done once a creditor decides to pursue a compulsory liquidation?
Whether or not liquidation can be stopped depends on a number of factors. First, has your company violated the terms of a loan agreement that is secured by a fixed or floating charge? If so the creditor may already have the express right to appoint an administrator or receiver. Does your company owe a debt of more than £750 repayment of which has been demanded? If so, the creditor has all they need to wind up your company through compulsory liquidation. Has your company received a winding up petition yet? The creditor can advertise that petition within 7 days of sending it to your office, at which point your bank accounts could be frozen by the courts, marking the official beginning of the liquidation process.
The good news is, if you have not yet received the winding up petition, or you’ve received it within the past 7 days, you may still be able to put the company into administration voluntarily. This would effectively halt any legal action being taken against the business throughout the administration process, so the threat of receivership or liquidation would no longer be an issue for the time being.
12th December 2018
Small and medium-sized enterprises (SMEs) across the UK are paying increasingly large sums of money to collect amounts owed to them by their clients and customers.Read More
4th December 2018
The number of independent retailers who closed down outlets during the first half of this year reached a record high level for any comparable period.Read More