www.company-debt.co.uk

[DavidL]

My business has been struggling to keep its head above water for a while and now one of the creditors has threatened a winding up petition. What are the implications of this? Thanks for any help you can offer.

[Derek Cooper]

Hello David and welcome to the forum.

A winding up petition can have some vary serious effects on a company. If the petition is granted by the court, then the company bank account will be frozen and trading suspended pending a winding up hearing. If the court decides that the company should be closed, then a winding up order will be issued.

For more information about winding up, have a look at: http://www.company-debt.co.uk/winding-up.html

[Steven Jackson]

Hello DavidL

You should seek advice from a corporate insolvency expert as soon as possible. If your company is wound up, you could risk beig disqualified from being a director and becoming personally responsible for the company debt. Have you considered the possibility of using a company voluntary arrangement or pre pack solution to resolve the company problems?

[DavidL]

Thanks for your prompt replies

I have actually been thinking about closing the business. Do you think it would be a good idea to simply let the creditor in question wind it up?

[Derek Cooper]

Hi David

I would advise against simply letting the company be wound up. The problem is that you will not be in control of the closure process and the liquidator will be appointed by the court.

Any investigation into your conduct as a director could be more rigorous from a court appointed liquidator. As such, It would be better to initiate the closure process yourself using a creditor's voluntary liquidation.

[Graham Wilson]

Hello David

If at all possible, you should remain in control of your company liquidation so you have the best opportunity to propose the insolvency practitioner / liquidator you want to work with. Of course this has an associated cost (normally about £5000 + VAT). Where possible this fee can come from the company. However, if it can not afford this, you as the director would have to foot the bill.