WINDING UP APPLICATIONS
A NOTICE OF WINDING UP IS THE FIRST STEP IN HAVING YOUR COMPANY LIQUIDATED.
- Received a notice of Winding Up?
- Your company may be closed down by a Liquidator
- The directors may become personally liable for the company debts
- Directors personal guarantees may become activated
A Notice of Winding Up is issued to the registered office of a company when a creditor has filed in Court an Application to wind up a company.
This normally takes place after a creditor obtains a judgement debt or following failure for a debtor company to comply with a Statutory Demand within 21 days.
It is very common for companies to have their registered office at their accountant’s premises. If this is the case and your accountant has received one of these forms for your company, it is vital that they inform you immediately to avoid your company being liquidated. The time starts from when the notice arrives at the registered office and not when you become aware of having received the notice.
If the Winding Up Application hearing proceeds and the Court is satisfied that a company should be wound up, the Court makes an order for the company to be wound up and the Court appoints an Official Liquidator. Normally, the appointed Liquidator has provided a consent to be appointed prior to the hearing upon the request of the creditor (or their lawyers) making the Winding Up Application. It is your creditor who selects the liquidator if you do not act.
It is important that Directors are aware that once a Winding Up application commences, it is normally based upon an act of insolvency having taken place and is very difficult to challenge.
If the Winding Up application is not dismissed and heard before a Court, the question of insolvency is usually taken into consideration.
WHAT WILL IT MEAN TO DIRECTORS IF THE COMPANY IS PLACED IN LIQUIDATION?
A company going into Liquidation can lead to financial disaster for Directors and shareholders, and also become a very stressful experience. The following is an example of what could happen:
- The Liquidator will take control of the company and the business from you
- Company bank accounts will be frozen
- The business is closed down or sold
- You will lose your job and income
- You will no longer be able to use any company assets such as cars, computers and phones
- All assets will be sold or scrapped
- Employment will be terminated
- Investment capital will be lost
- Loans provided to the company might not be repaid
- Director and shareholder loan accounts will be called in
- The Liquidator may make a claim against the directors for insolvent trading
- The liquidation may trigger a default with financiers
- The liquidation will terminate leases by triggering insolvency clauses in your contracts
- Creditors will enforce personal guarantees and potentially you could to go bankrupt if you cannot repay the claims
WE CAN HELP
It is crucial that company officeholders act immediately and obtain expert advice.
Your options are reduced and the time you have to act is now fixed by the impending court date.
You still have options to save your company and protect your personal assets. But you need to act promptly. Once the court orders the appointment of a liquidator you have lost control and stopping the process is extremely difficult.
It is important that you explore all the options as every company has different circumstances and the right decision is vital in order to maximise the outcome. The earlier you act, the more options will be available to you.
Our qualified staff use their extensive knowledge and experience to ensure you get the solution that is right for you. The business is given the best opportunity to survive and you have all the information and support that you need to make a decision on whether to liquidate your business. At the same time consider the ramifications of that decision on you personally.
In fact whether a Winding Up Notice has been issued or the company is just behind with its bills our qualified consultants will be able to explain your position and identify the specific solutions for you.