Winding-up proceedings can begin if the debtor company owes more than £750 and is not disputing the debt. This process is known as compulsory liquidation. The first step in the process is for you as a creditor to serve on the debtor a formal demand for payment either in the form of a statutory demand or a fully compliant letter.
If payment isn’t made in accordance with the time set out in the demand for payment then a Winding-up Petition can be sent to court. A Winding-up Petition is a formal document and once issued the court will give it a unique number and it will undergo a non-attended review approximately 6 weeks after the Winding-up Petition has been presented to the court.
As a Creditor, you must serve the Petition on the debtor company usually at its Registered Office. You are not allowed to Advertise the Winding-up Petition until after the Non-Attended review, the court will then issue a date and time for the hearing of the Winding-up Petition.
If successful, the debtor business will be closed and the appointment of a Liquidator will follow.
If the debtor business wishes to avoid Winding-up then it must agree to and pay before the hearing both the petition debt and the associated costs.
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About the author
Iain Bould is the head of our Commercial Litigation department.
Iain has over 28 years of experience in Commercial Debt Recovery having worked in both Private Practice and Industry and brings a pragmatic and commercial approach to recovering debts. With extensive experience working across all industry sectors, Iain has particular expertise in working with Insolvency Practitioners in advising and recovering outstanding insolvent company ledgers.
If you need any advice or further information please contact Iain at email@example.com