Winding Up Petition Lawyers, Liverpool
A winding up petition can have severe repercussions for a business and its directors – the most serious being the possible liquidation of the company. We understand how much stress and confusion this situation can cause. Our expert team of Solicitors offer immediate, clear and practical advice to mitigate the damage to your business.
It is important to remember that the earlier you respond, the higher your chances of a successful outcome. For swift winding up petition advice and action, contact us today.
What is a winding up petition?
If a creditor has made several attempts to recover debt from you, as a last resort they can petition the court to have your business liquidated. If the petition is passed and a winding up order is granted, the money raised from the liquidation will be used to repay the creditor.
When can a creditor apply for a winding up petition?
For a winding up petition to be considered by the court, the creditor must show that:
- the debt amounts to more than £750; and
- they have sent a 21-day statutory demand for payment before applying for the petition.
What is the winding up petition procedure?
The creditor will send a winding up petition to the court, where a judge will review it and, if approved, serve it on your company. Seven days after the petition is serviced, it will be advertised in The London Gazette, allowing any other creditors to support it. The petition will be heard at court on the agreed date, where it will either be approved or dismissed.
How to respond to a winding up petition
If the court notifies you of a winding up petition, you should act as quickly as possible and certainly within seven days. If the petition is advertised in The Gazette, your bank accounts may be frozen in response, causing real difficulty for repayment. Further, the advertisement could have a significant impact on your company’s reputation.
If you agree that the debt is due, your options are:
- Pay all outstanding sums to the creditor
- Arrange a Company Voluntary Arrangement (CVA), which allows you to repay the creditor over a period of up to five years and potentially provides an opportunity for recovery
- Obtain an Administration Order under which an administrator will be appointed to review and sell company assets, and all legal action will stop while administration is ongoing
- Dispute the debt – this will only be an option if there is proof that the debt claimed by the petitioner is Incorrectly claimed and/or inaccurate and there is genuine reason the debt amount is not owed.
How to challenge a winding up petition
If you have substantial grounds to dispute the debt, you should notify the creditor in writing as soon as you receive the petition. You must ask the creditor to agree not to proceed with the petition. If they decline, you may need to seek an injunction to prevent the petition from being advertised or file a statement of opposition with the court notifying your intention to defend the winding up petition at the hearing.
Contact Our Winding Up Petition Solicitors in Liverpool
Make a Free Enquiry
For advice on responding to a winding up petition, contact our team today for a FREE no-obligation call, and we will explain your legal rights and options. Call us now on 0151 659 1070 or complete our online enquiry form.