Can I wind up a company that owes me money?

Can I wind up a company that owes me money?

If a company owes you money, you can only wind it up by presenting a petition to the High Court for the company to be wound up (compulsory winding up). A winding-up petition is usually presented by a creditor on the grounds that the company cannot pay its debts, and this has to be proved in the Court.

What happens after a winding up order is granted?

Once the judge has granted the winding up order, the director’s powers cease. The court will appoint an official receiver to take over. Their role will be to communicate with the directors, secure any company assets, and make staff redundant.

How do you defend a winding up order?

Common Defences for a Winding Up Petition

  1. Pay off the creditor (they will also want the costs of bringing the petition reimbursed too).
  2. Agree a Company Voluntary Arrangement with the company’s creditors.
  3. Put the company into administration.
  4. Persuade the creditor not to advertise the petition.

How do you prove someone owes you money?

Many states require proof that you made a written demand for the money before you file suit.

  1. In your demand letter, state the amount of money you’re owed and why.
  2. Make a copy of the letter before you send it so you have it for your records, and can present the copy to the court later if you end up filing suit.

What are the consequences of winding up?

Consequences of Winding Up Winding up doesn’t take away the existence of the company completely. The company continues to exist as a corporate entity till its dissolution. All the ongoing business of the company is administered by the liquidator during the phase of liquidation.

Can a winding up order be rescinded?

This decision held that a winding up Order cannot be discharged or rescinded after it had been made and the only remedy was to apply for a stay of the winding up under section 243 of the Act.

How do I stop compulsory winding up?

When a Winding up Petition has been Filed but Not Yet Advertised in The Gazette, You Can Stop It By:

  1. Pay off the Creditor.
  2. Dispute the Debt.
  3. Enter the Company into Administration.
  4. Agree on a Company Voluntary Arrangement (CVA)
  5. Negotiate with the Creditor so That They Don’t Advertise.
  6. Apply for a Rescission Order.

How do you challenge a winding up petition?

The procedure to oppose a winding up petition is to file a witness statement in opposition in court not less than five business days before the date of the hearing of the petition (rule 4.18(1), Insolvency Rules).

How does a creditor get a winding up order?

If the debt remains unpaid, the creditor is eligible to petition the court for payment. What is the procedure and timescale of a winding up order? Your creditor will ask their solicitor or legal team to apply for a compulsory winding up order. The winding up ‘petition’ is the name given to the application sent to court.

What can a winding up order be used for?

A winding up order can be used by creditors to enforce payment of a debt by a delinquent company.

Do you have to prove debt in winding up?

In accordance with Rule 79 of the Companies (Winding-up) Rules, every creditor in a winding up by the court shall prove his debt, unless a judge in any particular winding up shall give directions that any creditors or classes of creditors shall be admitted without proof. .

How does winding up affect secured creditor rights?

The rights of the secured creditor to deal or realise security over company assets are not affected by the winding up order. However the secured creditor is not entitled to interest on the debt if the security is not realised within 12 months of winding up or such further period as allowed by the Official Receiver.