Dealing with your limited company's debts
Getting a winding-up order
Your creditors can apply to the court to close down your company. They do this by making an application called a ‘winding-up petition’.
You can apply to stop your creditors from making a winding-up petition if you were given a statutory demand.
They can withdraw the petition if your company pays the debt or makes an arrangement to pay it.
Attending the hearing
If the petition is accepted, the court will arrange a date for a hearing.
You must attend the hearing. Your creditors will announce when and where the hearing will take place in The Gazette.
Your company can be put into the control of someone else until the hearing happens. This is known as ‘provisional liquidation’.
If the court decides you cannot pay your debts
The court will issue a winding-up order.
An officer of the court (‘official receiver’) will be put in charge of winding-up your company. You must co-operate with the official receiver.
When you get a winding-up order:
- your company’s bank account will usually be frozen
- its assets or property will be sold by the official receiver
If any part of your company is bought with the intention of discontinuing the business (not running it as a ‘going concern’) then your employees will lose their jobs.
You can be banned from being a director for up to 15 years if you do not carry out your duties properly.
Cancel a winding-up order
You can apply to cancel a winding-up order if you do not think you need to pay your creditors. You must do this within 5 working days of getting the order.