Have you had a client issued with a Winding Up Petition (WUP) against their company?
In these situations it is extremely important to seek professional advice at the earliest opportunity in order to protect your client’s company and their interests as much as possible.
Due to the costs and implications involved in a WUP, issuing one to a company suggests that the creditor is very serious about recovering any money owed to them and probably sees this as a last resort after breakdowns in the business relationship. HMRC have been very quick in recent months to issue WUPs. Any creditor with a debt of £750 or more can move to issue a WUP.
A WUP, issued by HMRC or another creditor, is by far the most damaging and serious course of action that can be taken and will result in its closure and assets sold/employees dismissed if left to run its course in court with no defence or strategy/ proposal suggested as an alternative.
If the company is viable going forward and is to be saved then immediate action is essential! The very act of presenting a petition is likely to result in the bank account being frozen, which can cripple trading.
If the debt can be paid in full then this should be done immediately unless the debt is disputed, in which case legal representation is essential. Otherwise there may still be time to propose alternatives to the WUP such as a Company Voluntary Arrangement (CVA) or Administration. These are powerful tools to help rescue a company from collapse.
It is vital to seek professional insolvency advice by this stage to ascertain if the WUP can be halted and alternative arrangements made to pay the debt or risk the company being handed over to the Liquidator.
There may also be personal liability implications to the director or board members of a company issued with a WUP if personal guarantees have been made within the business or they are implicated in trading whilst insolvent.
If any of your clients have been issued with a WUP then do not hesitate to get in touch with us and we can work together to save the employees jobs and rescue the company.
Focus Insolvency Group 