The compulsory liquidation is initiated by a creditor when the company has failed to meet its liability within the time frame given by the creditor to pay its debts.
Most often it is the HM Revenue & Customs who will issue the winding up petition and serve at the company’s registered office and then it is also advertised in the London Gazette. The effect of the publication can be devastating as the bank account will be frozen immediately and can put the company out of business in no time.
If the steps are not taken to have the winding up to be withdrawn, the Official Receiver will be appointed as the Liquidator.
If the winding up petition has been served upon the company but the hearing has not yet taken place, you can still attempt to place the company into creditor’s voluntary liquidation by instructing the Insolvency Practitioner who will request the petitioning creditor to withdraw subject to their legal costs are met. There is no guarantee that the petitioning creditor will withdraw.
If you find yourself in such circumstances please contact us immediately on 01923 820966 for advice.