Act early to avoid a winding up petition
With the moratorium on winding up petitions coming to an end on 30 June, can we expect an avalanche of petitions come 1 July? Considering that in 2019 there were 2,945 compulsory liquidations vs 1,352 in 2020 (and in Q1-2021 a paltry 108) thanks to the UK government’s various interventions, it seems very likely. So what should businesses do now to avoid this situation?
When a winding up petition is issued by a creditor, it is trying to force a company into liquidation and this creates many challenges for the companies on the receiving end. From the moment the petition is lodged at court a company’s ability to invest in itself and to continue to trade is curtailed and directors are potentially personally at risk of trading insolvently, amongst other issues.