If a limited company cannot pay its debts it can be liquidated or wound up by the people or the organisation the company owes money to. This is done by filing a petition at Court, otherwise known as a Winding Up Petition.

If your company has received a formal demand for payment, you should seek advice from a solicitor or Insolvency practitioner as soon as possible.

We know it can be worrying times therefore we have put together this short video on the repercussions of liquidation and how a Winding up petition works.

Winding Up by the Court by Turpin Barker Armstrong

If you would like to talk about liquidation or a Winding Up Petition call us today. All your options will be explained and all meetings are confidential and require no commitment to any proposals we suggest.

Call 020 8661 7878 or email insolvency@turpinba.co.uk  

Here is our last lot of insolvency figures for 2021 which are part of a monthly series published by the Insolvency Service.

During the pandemic overall numbers of company and individual insolvencies were lower than previous years however since mid 2021 CVL numbers have been creeping up and are now at their highest and resemble what it was like pre-pandemic. The numbers for other insolvency procedures still remain lower however this is likely to be partly driven by government measures that were put in place to support businesses and individuals during the pandemic which are now coming to an end or have already ended.

The graph below shows the data from December 2019 to December 2021 for company insolvencies in England and Wales.


There were 1,486 registered company insolvencies in December 2021 in England & Wales

• 20% higher than the number registered in the same month in the previous year (1,237 in December 2020)
• 33% higher than the number registered two years previously (1,120 in December 2019)

These figures are made up as follows:

Creditors Voluntary Liquidations = 1,365 (37% higher than in December 2020 and 73% higher than in 2019)
Compulsory liquidations = 42 (2% lower than December 2020 and 75% lower than 2019)
Administrations = 72 (52% lower than 2020 and 49% lower than 2019)
Company Voluntary Arrangements = 7 (84% lower than 2020 and 67% lower than 2019)
Moratorium = 15 between June 2020 & December 2021
 

Detailed figures and information of monthly company insolvency data for England & Wales can be found at the Insolvency Service here

Could a Moratorium give you the necessary breathing space to save your business?  Find out  here.   


Want to know more about each Insolvency Procedure listed above? click each link below for our insolvency advice pages:

Company Voluntary Liquidation (CVL)
Compulsory Liquidations or winding up by the court
Company Voluntary Arrangement (CVA)
Company Administration 

Last month new powers were given to the Insolvency Service against unfair directors who dissolve their companies to avoid paying their liabilities due. The new legislation extends the Insolvency Services powers to be able to investigate and disqualify these rogue directors. This goes hand in hand with the Rating (Coronavirus) and Directors Disqualification (Dissolved Companies) Bill which our senior Partner Martin Armstrong talked about in our latest webinar which you can view here  or read our blog on the Act here . The Rating (Coronavirus) and Directors Disqualification (Dissolved Companies) Bill will also help to whittle out those directors who shut down companies to avoid repaying the support loans given by the Government which helped business through the pandemic.  

Business Secretary Kwasi Kwarteng said:
“We want the UK to be the best place in the world to do business and we have provided unprecedented support to businesses to help them through the pandemic. These new powers will curb those rogue directors who seek to avoid paying back their debts, including government loans provided to support businesses and save jobs. Government is committed to tackle those who seek to leave the British taxpayer out of pocket by abusing the covid financial support that has been so vital to businesses”

The Insolvency service investigative powers will be extended to directors of companies that are already dissolved and if misconduct is found the director will face serious consequences including prosecution. The new act also allows the Business Secretary to apply to the court for an order to require former directors who have been disqualified to pay compensation to creditors who have suffered due to their fraudulent behaviour.

Stephen Pegge, Managing Director of UK Finance, said:
“The ability to dissolve a company when necessary is a right reserved in legitimate circumstances where there are no outstanding creditors, however, it can be open to abuse. The banking and finance industry therefore supports this legislation which will provide much needed powers to the Insolvency Service to help hold rogue directors to account by providing additional deterrents and easier enforcement of the rules.”

For reference and more information see - https://www.gov.uk/government/news/crackdown-on-directors-who-dissolve-companies-to-evade-debts

A director has a duty to act in the best interests of the company, creditors and shareholders at all times. Continuing to trade and incurring debts when the company is, or will soon be, insolvent could result in the director becoming personally liable should the company go into liquidation.
 
A director should seek advice from a qualified insolvency practitioner as soon as he or she becomes aware that the company is, or may soon be, insolvent. As licensed insolvency practitioners we are able to provide remedies and procedures only available to members of our profession. If you want to save your business we will almost certainly have a solution to suit your needs.

Act now and get in touch today, we are often told we wish we came to you sooner!

Have a look at our Restructuring a company page to see some of the different options that may be available to you.

Call 020 8661 7878 or email insolvency@turpinba.co.uk