If a company cannot pay its debts, you can apply to the courts to have it wound up. Winding-up a company is also known as compulsory liquidation, and we have taken a look at the process below.
How Do I Prove to the High Court That the Company Which Owes Me Money Cannot Pay Its Debts?
You need to provide evidence that the company owes you money, showcasing how much they owe you. You can do this using a statutory demand, including the amount owed and the date the demand was served. You can also use a court judgement detailing the amount awarded, your costs and interest, the date of the judgement, the court name and the case number.
How Do I Put a Company Into Compulsory Liquidation?
You can put a company into compulsory liquidation if it cannot pay its debts. To wind up a company, you need to prove that the company cannot pay you, and you must be owed more than £750. You then apply to the courts by filling in the correct forms.
In Which Court Should a Winding-Up Petition Be Presented?
The right court depends on how much share capital the company has, which can be found on Companies House. If the paid-up share capital is £120,000 or more, the winding-up petition should be presented to the High Court. If it’s under £120,000 you need to find the court nearest to the company’s registered office.
What is the Procedure for Presenting a Winding-Up Petition?
The procedure for presenting a winding-up petition requires you to present evidence to the courts and fill in form Comp 1. This needs to include the company’s correct details and you need to say if any European Community regulations apply. If the company has been dissolved, you will also need to request that the court restores the company. You will also need to fill in form Comp 2 confirming the details of your winding-up petition.
Process for Presenting a Petition
Once you have applied for your petition, you will get a copy from the court. You must then serve it to a company director or employee, or you can attach it to the company’s front door if you are unable to serve it in person. You must also provide a certificate to the court confirming that you have served the petition.
What are the Costs of Putting the Company Into Compulsory Liquidation?
There are costs associated with putting a company into compulsory liquidation. This includes court fees of £302 and a petition deposit of £2,600 which is used to manage the winding-up. You might be able to get these fees back, depending on whether the company can afford to repay them.
Can Anyone Appeal Against or Stop a Winding-Up Order?
A company can appeal against a winding-up order, but they must do so within five days of the petition being served. The company must give evidence explaining why the order should be stopped.
What Happens After a Company Goes Into Compulsory Liquidation?
Once the winding-up petition has been approved, control of the company is handed over to an independent liquidator. The company’s directors lose their power to make decisions on behalf of the company, and the company’s affairs are wound up by the liquidator.
What are the Duties of a Company Director in Compulsory Liquidation Proceedings?
During compulsory liquidation proceedings, a company director must give the liquidator any information they need about the company, hand over assets, including paperwork and company records. They also need to agree to be interviewed, if the liquidator requires them to be.
When Will Compulsory Liquidation End?
It’s hard to say when compulsory liquidation ends, as the process can vary depending on the size of the company and how complex the finances are. It usually takes several months to a year, but up to two years in more complex cases.
Being owed money is stressful, inconvenient and it can have a significant impact on your finances. Luckily, Cobra Financial is always on hand to help you recover funds. Contact us to find out more.
