What is a Winding Up Petition?
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Received a Winding Up Petition?
One of the most serious issues a company may face is being presented with a Winding Up Petition (WUP). This usually means that the creditor (petitioner) has exhausted all routes to collect the outstanding debt and their only option is to petition for the closure of the company.
Seems like not a very commercial thing to do? True, but if your company is presented with this, it HAS to act otherwise it will be wound up. So, the creditor forces the company into a corner.
Who can issue a Winding Up Petition?
Trade suppliers, HMRC and the banks often issue Winding Up Petitions. The most usual creditor to issue a Winding Up Petition is HMRC due to the fact that they are not a commercial entity.
What are Your Options?
If your company is presented with a Winding Up Petition (WUP), it means you, the director, must act in some way.
Although a very serious situation you will still have options, all be it limited. These may be:
- Clear the debt
- Adjourn the hearing to buy more time
- Potentially look at a CVA
- Restructure the company / business
Help with a Winding Up Petition
All of the above options have different advantages and disadvantages, and may not be possible for your situation.
However, one thing is absolutely guaranteed - if nothing is done, not only will the company close, the business will go.
So, it's essential you take advice today to understand your options in detail to formulate a plan.
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Winding Up Petitions: The Complete Guide for Directors
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