Inland Revenue Winding up Petition
Inland Revenue Winding up Petition Process
Protection Against Winding Up Petition For Company Directors
“Winding up” in this case refers to the closure of a business, and the processes involved in bringing the company to an end through court proceedings and then sale of company assets. If a creditor wishes to liquidate a particular company because debts are not being paid, they can submit a winding up petition. It is important to realise that companies can in fact submit a winding up petition for themselves, but it is commonly submitted by creditors who have grown impatient with false promises that the company has made regarding payments. Winding up is a very serious matter and can prove detrimental to both creditors and businesses.
The Inland Revenue may be one of the creditors you owe money to, and they are very effective at recovering their debts. They will usually have tried several methods to get their money back, and but if you have not paid or you can’t agree on Payment Terms, your company receive a Winding Up Petition.
Prevent Further Action
You can cease proceedings by paying the Inland Revenue all of the money you owe to them, or by implementing a payment plan that both parties can agree to and your company can stick to. It is always advisable to keep in contact with the Inland Revenue all the way through the proceedings. This is a very compromising position for a business to be in, it is hence of paramount importance that you face the problem head-on and try to deal with it in the most effective manner.
A date and time for a court case will have already been arranged and will be stated on the petition. It is important to realise that there can be a considerable amount of time between your company receiving the petition and the specified court date. You will normally be allowed to continue trading before the court date, providing you are not breaking any other laws such as continuing to trade whilst insolvent. However, it is vital that your trading is nothing less than exemplary in this time period, as any trading undertook by your business between receiving the petition and the pre-arranged court date will be heavily scrutinised.
A legal representative will usually represent the company at court, although in certain circumstances, a company representative may be allowed to represent the company, if this has been approved by the courts. If your company loses the case, the Winding Up Petition will become effective immediately, and a liquidator will be appointed to sell company assets.
Pressure For Directors
Throughout this entire period, the company directors will be under pressure and thorough scrutiny. They will have to submit accounts and a list of assets to the Official Receiver or the Liquidator’s office, as well as a list of creditors that the company owes money to.
If your business has a Winding Up Petition submitted against it, you need to act swiftly and effectively. You can seek independent and professional advice from an Insolvency Auditor who will help you make the decisions that will be most favourable to your company, and ultimately help to determine your company’s outcome.