If you’re a business owner the one thing you don’t want to receive is a winding up petition because this means you’re creditor is serious enough to take the ‘nuclear’ option when it comes to recovering money. So what do you do as a director? How do you react to this threat to your business?
The first thing to look at is the reason why it has got to this point. A creditor must wait a minimum 21 days and be owed more than £750 to petition the court and generally they will have done all they can to recover the debt. There will of course be cases where companies use this method to try to scare people into paying up but in all cases the winding up order should be taken seriously.
If you are faced with a winding up order you must act quickly whether you actually owe the money or not. This can either come in the form of settling the amount outstanding or contesting it. You can also buy time if the correct procedures and timescales haven’t been followed such as not giving sufficient warning or time to pay the debt.
In all cases where a winding up order is issued against your business you must seek legal advice on how to deal with it to ensure the best outcome.