Winding-Up Petition - Advice

[OliJ17]

To cut a long story short, all options have been considered for my business. Due to a shareholder dispute a winding-up petition to the courts is my only option as Director.

My question is...
When filling out a winding-up petition as the sole Director of the company to be wound up, do I petition as an indivual using my name and home address, or do I use my details, but the companies address as I'm petitioning as a Director?

Thanks everyone. I hope that makes sense! Any help would be hugely appreciated if anyone has the time. I cannot afford solicitor advice right now and the sparce winding up petition samples I've found online are rarely from a director petitioning to close down their company in the same circumstances.

 

[ChrisCallaghan]

Hi @OliJ17 ,

Though I have often suggested this route to directors, usually I encourage using a solicitor, and so I have not seen the forms you are referring to. I'm sure the other insolvency professionals here on UKBF may be along shortly to help answer your questions.

To help others answer your questions, may I ask if you are looking to wind up the company on the grounds that you are a creditor of the company, or on 'just & equitable' grounds?

 

[OliJ17]

Hi @OliJ17 ,

Though I have often suggested this route to directors, usually I encourage using a solicitor, and so I have not seen the forms you are referring to. I'm sure the other insolvency professionals here on UKBF may be along shortly to help answer your questions.

To help others answer your questions, may I ask if you are looking to wind up the company on the grounds that you are a creditor of the company, or on 'just & equitable' grounds?

Thanks Chris!

Yeah I appreciate that. Solicitor advice would be ideal right now i just cant afford it.

The forms I've filled are Comp 1 and Comp 2 from the government website.

Its a petition on 'just and equitable' grounds! The company is very much insolvant with no rescue options available and cannot pay its debts.

Thanks for the reply

 

[Frank Wessely]

To cut a long story short, all options have been considered for my business. Due to a shareholder dispute a winding-up petition to the courts is my only option as Director.

My question is...
When filling out a winding-up petition as the sole Director of the company to be wound up, do I petition as an indivual using my name and home address, or do I use my details, but the companies address as I'm petitioning as a Director?

Thanks everyone. I hope that makes sense! Any help would be hugely appreciated if anyone has the time. I cannot afford solicitor advice right now and the sparce winding up petition samples I've found online are rarely from a director petitioning to close down their company in the same circumstances.

Hi OliJ17

Could you add more context please.

What does/did the company do?
Is it still trading?
In round sums what are the values of its assets and its liabilities?

Thanks.

 

[Michael Loveridge]

It may seem an obvious question, but if, as you say, the company is hopelessly insolvent why bother winding it up at all? If you just leave it then either a creditor will do the job for you, at their expense, or it will eventually be struck off the register, again at no expense to you.

Winding up petitions are not something that lay people should get involved with. It is emphatically not just a matter of filling in a form, sending it off and waiting for a winding up order to arrive. The law relating to insolvency is highly technical, and if you don't know what you're doing you will almost certainly cock it up.

 

[Frank Wessely]

It may seem an obvious question, but if, as you say, the company is hopelessly insolvent why bother winding it up at all? If you just leave it then either a creditor will do the job for you, at their expense, or it will eventually be struck off the register, again at no expense to you.

Winding up petitions are not something that lay people should get involved with. It is emphatically not just a matter of filling in a form, sending it off and waiting for a winding up order to arrive. The law relating to insolvency is highly technical, and if you don't know what you're doing you will almost certainly cock it up.

Hi Michael

I agree with your second paragraph!

I gained the impression (rightly or wrongly) that the OP is quite anxious about the current company situation and is therefore keen to see it resolved ASAP by way of an appropriate procedure. That being said it is not clear whether the OP has taken any professional advice at all, given the comments regarding the lack of funds to pay for legal help. That concerns me, if for example the OP is relying on information gleaned via Google searches. An example being if the company is heavily insolvent then the Petition to the Court would not be on "Just and Equitable" grounds. I do not doubt the gravity of the shareholder dispute but there could well be other options to consider both from a corporate and a personal perspective.

@OliJ17 You are welcome to give me a call to discuss matters as I do not charge for exploratory discussions. Or you can contact other professionals in the forum.

Thanks.

 

[ChrisCallaghan]

It may seem an obvious question, but if, as you say, the company is hopelessly insolvent why bother winding it up at all? If you just leave it then either a creditor will do the job for you, at their expense, or it will eventually be struck off the register, again at no expense to you.

Winding up petitions are not something that lay people should get involved with. It is emphatically not just a matter of filling in a form, sending it off and waiting for a winding up order to arrive. The law relating to insolvency is highly technical, and if you don't know what you're doing you will almost certainly cock it up.

I think the above would be a fair comment, but @OliJ17 mentioned in his original post that he is the sole director.

@OliJ17 a similar idea to Michael's would be to cease to trade, and invite creditors to wind up the company, similar to what is affectionately known as the SpongeBob plan (link below). May I ask if there are any specific reasons why you wish to see the company wound up?

CLOSING A LIMITED COMPANY WTH INSUFFICIENT FUNDS WITH WHICH TO PAY AN INSOLVENCY PRACTITIONER

CLOSING AN INSOLVENT LIMITED COMPANY WITH INSUFFICIENT FUNDS WITH WHICH TO PAY AN INSOLVENCY PRACTITIONER If a company is unable to carry on trading due to becoming insolvent the standard procedure for closing it down is for the directors to appoint an Insolvency Practitioner to liquidate it...

www.ukbusinessforums.co.uk

 

[Frank Wessely]

I think the above would be a fair comment, but @OliJ17 mentioned in his original post that he is the sole director.

@OliJ17 a similar idea to Michael's would be to cease to trade, and invite creditors to wind up the company, similar to what is affectionately known as the SpongeBob plan (link below). May I ask if there are any specific reasons why you wish to see the company wound up?

CLOSING A LIMITED COMPANY WTH INSUFFICIENT FUNDS WITH WHICH TO PAY AN INSOLVENCY PRACTITIONER

CLOSING AN INSOLVENT LIMITED COMPANY WITH INSUFFICIENT FUNDS WITH WHICH TO PAY AN INSOLVENCY PRACTITIONER If a company is unable to carry on trading due to becoming insolvent the standard procedure for closing it down is for the directors to appoint an Insolvency Practitioner to liquidate it...

www.ukbusinessforums.co.uk

affectionately

 

[Michael Loveridge]

@OliJ17 a similar idea to Michael's would be to cease to trade, and invite creditors to wind up the company, similar to what is affectionately known as the SpongeBob plan (link below). May I ask if there are any specific reasons why you wish to see the company wound up?

Yes, that's excellent advice from Spongebob. It's exactly what I was saying, only with a great deal more detail.

The only comment I'd make is that the chances of persuading a creditor to throw about £3,000 away winding up a company that you've admitted is totally insolvent are somewhere between nil and zero!

 

[ChrisCallaghan]

Given the company is "very much insolvent" I'd expect HMRC are likely a creditor. If so they will eventually wind up the company, regardless of the cost. HMRC are pretty much back to pre-Covid normal in this regard. If no creditor comes forward, Companies House will look to dissolve the company for non-filing of accounts. Creditors can, and do, object to this kind of action, but will give up after several objections. You can certainly expect the likes of HMRC and BBL lenders to object.

The major positive with this tactic is that it is cost free. The obvious negative, as @Frank Wessely has pointed out, is the uncertainty and the time in limbo waiting for either of these things to happen.

 

[OliJ17]

Hi everyone

I appreciate the input and I appologise for the late reply.

My urgency was related to employees. Their redundancies are being held up due to this 50/50 deadlock.

Correct me if I'm wrong but the Spongebob route can take a long time. This means my team will have a significant wait. Its not their fault and its the last thing I want for them, they're all good people and if I had it my way this would be processed via a CVL. This led me to the conclusion that the best route was a winding up petition to reduce delays to them.

Ive read through and its sounding like I have no option but to scrape together the funds to speak to a solicitor so I don't make significant mistakes during the process. Everyone here had been incredibly helpful so far and opened my eyes to the challenge ahead.

 

[ChrisCallaghan]

Given the redundancy issues you've now mentioned, I would forget the previous messages about dissolving the company and the SpongeBob plan. The Redundancy Payments Service do not pay out if the company is dissolved - they only pay out when the company enters into a recognised form of insolvency. And as you've rightly guessed, you could be waiting a long time for a creditor to come forward to wind up your company. For example, it could take HMRC over a year to get round to issuing a petition.

I now see why you are looking at going down the winding up petition route.

Ive read through and its sounding like I have no option but to scrape together the funds to speak to a solicitor so I don't make significant mistakes during the process

Given that there are redundancies at play here, I do think it would be wise to speak to a solicitor familiar with this process. Probably wouldn't hurt to shop around too. @OliJ17, would you like me to message you the details of some solicitors I can recommend to help you get started?

 

[Frank Wessely]

Given the redundancy issues you've now mentioned, I would forget the previous messages about dissolving the company and the SpongeBob plan. The Redundancy Payments Service do not pay out if the company is dissolved - they only pay out when the company enters into a recognised form of insolvency. And as you've rightly guessed, you could be waiting a long time for a creditor to come forward to wind up your company. For example, it could take HMRC over a year to get round to issuing a petition.

I now see why you are looking at going down the winding up petition route.



Given that there are redundancies at play here, I do think it would be wise to speak to a solicitor familiar with this process. Probably wouldn't hurt to shop around too. @OliJ17, would you like me to message you the details of some solicitors I can recommend to help you get started?

I suspected that there were a few hidden but important factors here.

Thanks.

 

[OliJ17]

Given the redundancy issues you've now mentioned, I would forget the previous messages about dissolving the company and the SpongeBob plan. The Redundancy Payments Service do not pay out if the company is dissolved - they only pay out when the company enters into a recognised form of insolvency. And as you've rightly guessed, you could be waiting a long time for a creditor to come forward to wind up your company. For example, it could take HMRC over a year to get round to issuing a petition.

I now see why you are looking at going down the winding up petition route.



Given that there are redundancies at play here, I do think it would be wise to speak to a solicitor familiar with this process. Probably wouldn't hurt to shop around too. @OliJ17, would you like me to message you the details of some solicitors I can recommend to help you get started?

Recommended Solicitor advice would be more than welcome and very helpful. Thank you

 

[ChrisCallaghan]

Recommended Solicitor advice would be more than welcome and very helpful. Thank you

Message sent. Good luck and please let us now how you get on!