From today (1 April), creditors can present a winding up petition without (a) having to give 21 days to the debtor company to make proposals to pay, and (b) being owed a debt(s) of £10,000. Given that all temporary restrictions and processes have now ended, the ‘gloves are off’ when it comes to debt collection.
Although presenting a winding up petition incurs a hefty court fee, the effect (or even threat) of a winding up petition can elicit a swift payment to avoid the consequences that an outstanding petition can present to a debtor company, including
- reputational impact,
- director duty concerns – wrongful trading/misfeasance,
- the company’s lender freezing its bank account(s),
- the risk of making payments that can be clawed back if the company is wound up; and
- ultimately a winding up order.