I am owed in excess of £750 by a limited company
A creditor seeking to recover a debt can issue a Winding up Petition in Court. Seeking to wind up a Company by this method is a powerful recovery process open to an unsecured creditor.
The creditor must prove the following:
- They are owed £750 or more; and
- Able to prove that the Company cannot pay its debts as and when they fall due.
Before issuing a Petition, we would recommend that consideration be given to the approximate costs involved in the process, which includes Court fees of £280 and Petition deposit of £1600, plus the costs of any lawyers engaged to assist in the issuing of the Petition. We would suggest that given the legal nature of the documentation involved, a lawyer is instructed to assist you in the Petition process.
A hearing date will be set to consider the Petition and the debtor will be informed if the Order is subsequently made. The Official Receiver will be automatically appointed Liquidator, however creditors will have the opportunity to appoint an Insolvency Practitioner of their choice, subject to certain voting requirements.
This is your opportunity to ensure that your best interests are being represented in the process, and you should actively engage in nominating an Insolvency Practitioner to be appointed Liquidator.
Once a Winding up Order is made, and a Liquidator appointed, the following takes place:
- Company assets are realised;
- Full investigations are undertaken into any actions that may be brought which would result in additional realisations being made for the benefit of unsecured creditors;
- If realisations allow, dividends are paid to creditors, whose claims have been proved.
In summary this is an expensive recovery procedure to undertake by creditors, therefore all other avenues of pursuing your debt, should be considered, prior to the issuing of the Petition, and we would recommend that you contact one of our specialists to ensure that this is the right solution for you.
Dean Nelson, Nicholas Lee, Andrew Stevens and Michael Roome are all licensed in the United Kingdom to act as Insolvency Practitioners by the Institute of Chartered Accountants in England and Wales. They are bound by the Insolvency Code of Ethics which can be found here.
When acting as Receivers, Administrative Receivers or Administrators they act as agents only, without personal liability and when acting as Administrators, the affairs, business and property of the company are being managed by them.