What is it?
Otherwise known as compulsory winding up, compulsory liquidation is a sign that a creditor has given up trying to recover money and has asked the courts to step in. This is a very serious action for creditors to take and if a company is subject to a compulsory liquidation order, it can severely curtail its ability to conduct business.
What will happen?
A creditor who is owed in excess of £750 may present a petition for the winding up of a company if the debtor fails to pay within 21 days and does not dispute the debt.
If the debt continues to remain outstanding at the date of the hearing, a winding up order is made by the court. Once the order has been made, the company is in liquidation and control of its affairs passes to the Government department known as the Official Receiver’s Office (OR).
In the event that the company has assets, the OR will instruct agents to secure them. It is also likely that the OR will call a meeting of creditors with a view to appointing an insolvency practitioner to administer the liquidation.
How White Maund can help
If you have an irate creditor talking about winding up your company, you’ll need to take action urgently. For the benefit of our professional advice, call or email us. We understand the pressure you’ll be under and may be able to see solutions you have missed.
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