In order to pressure businesses to pay their debts, an increasing number of companies are applying for Winding Up Petitions because of the serious consequences for a company if they are ignored. If you receive a winding up petition it is vital to act quickly or risk losing your business.
If a creditor of a limited company wants to force the closure of a business due to an outstanding debt, this process is known as winding up. The creditor must first issue a statutory demand for the payment of their debt. If the problem is not resolved within 21 days, a petition for the winding up or closure of the business can be issued.
When a winding up petition is granted by the court, the company in question will be liquidated. The directors of the company can of course challenge the petition. However, once a winding petition is issued, there will be serious consequences for the business even if the debt owed is subsequently paid or successfully challenged. Continue reading ‘Why a Winding Up Petition is Bad News For Your Company’ »