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The Facts About a Winding Up Petition

February 09, 2012 | Comments: 0 | Views: 175

A winding up petition is one of the worst actions that can be taken against a company. Many times this entails the fact that payment deals have failed and the company has broken all trust with their creditors. In a petition of this type usually directors have failed to pay their bills and checks have bounced. It involves a complete breach of trust and a break-down of finances. It is not unheard of for a creditor to issue a malicious petition against the company in question.

Winding up procedures

If a creditor makes the decision to move forward with the petition they are usually very serious about recovering their money. They intend to drive the company they are in a dispute with out of business as well. They have to hire a winding up petition lawyer and pay filing fees and a court cost. An application is made to the court to request one of these petitions be filed against a delinquent company. This is a very technical matter and experts with much legal experience will need to be involved throughout the whole process.

The courts will then issue a hearing date in which they will hear the petition case. In the case of the company not responding or showing up for the hearing, the courts will usually issue the petition. Once the petition has been issued the company will be served by a process server. With the help of a good winding up lawyer many times a company can get help resolving the debt. There are some things that a company needs to be aware of if served:

* The liquidator will more than likely dispose of the company's assets. * The liquidator will also investigate the directors of the company that is in debt. * If served with a petition the bank will usually freeze the company's assets. There is usually no way to prevent this if it is issued.

It is very clear that if a creditor starts winding up procedures against a company it can have far reaching circumstances. This is a situation that no company wants to get tangled up in. More and more creditors are using winding up procedures than at any time ever before. Every company should be advised of this and be sure to practice honest business in all that they do. Every company director should be aware of what is involved in this very legal matter and do everything that they can do to prevent it from happening to their company.

Get to know more on winding up petition solicitors.

Source: EzineArticles
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