A petition is presented to Court for the company’s winding-up and a date set to hear the petition. A copy of the petition is served on the company. The petition to wind up the company must be advertised in the London Gazette not less than 7 days before the court hearing date.
The petition could be served by a creditor, the company, shareholders who have a financial interest in the company (there are additional restrictions for shareholders), an administrator or supervisor of a CVA or The Secretary of State for the department of Business Innovation and Skills on the basis of public interest grounds.
The petitioner must serve a sealed copy of the petition, which means it has been lodged in court, on the company and also advertise the petition in the London Gazette (for companies registered in England and Wales) and Belfast for companies registered in Northern Ireland.
The Winding-Up Order
Assuming the petition is not defended, at the hearing, the Court has various options including the dismissal or adjournment of the petition. However, the Court cannot refuse to make a winding-up order on the basis that a company has no assets.
If a winding-up order is made, any disposal of property or shares, after the date of the petition is void, unless the Court orders otherwise. Consequently, a company that carries on trading after receipt of a petition could find that a subsequently appointed Liquidator takes action to recover assets/money dissipated during this period.
Interview of Directors
The directors will be notified and will be required to attend an interview at the Official Receiver’s office and complete a statement of the company’s assets and liabilities.
The Official Receiver also has the task of investigating the company’s affairs including the reasons for failure.
Appointment of a Liquidator
The Court can appoint a Provisional Liquidator if there appears to be a need to protect the company’s assets. Alternatively the Official Receiver has 12 weeks to decide whether to convene a meeting of the company’s creditors to appoint an Insolvency Practitioner(IP) as Liquidator.
The process to wind-up a company can be complex and expensive. It is generally much quicker and far less troublesome to wind up a company voluntarily. Also the implication is generally that the directors have failed to take the necessary action to wind up the company.
The options for a financially distressed business need to be very carefully considered. Simply forward your details on our Contact Form and we will contact you. Alternatively ring us on our FREE ADVICE LINE 0800 781 0990.