Dealing with your limited company's debts

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1. If your company cannot pay its debts

Your limited company can be liquidated (바카라 사이트˜wound up바카라 사이트™) if it cannot pay its debts.

The people or organisations your company owes money to (your 바카라 사이트˜creditors바카라 사이트™) can apply to the court to get their debts paid.

They can do this by either:

Get professional advice from a solicitor or insolvency practitioner if your company is in debt.

2. Responding to a court judgment

You have 14 days to respond to a court judgment.

To respond, you must do one of the following:

If you do not respond to the court judgment within 14 days, your creditors can apply to have your assets seized by a bailiff or sheriff.

Your creditors can apply to wind up your company if your assets are not worth enough to pay your debts.

3. Responding to a statutory demand

You have 21 days to respond to a statutory demand.

To respond, you must do one of the following:

Your creditors can apply to wind up your company if you do not respond to the statutory demand within 21 days.

Stop your creditors from applying to wind up your company

You can apply to the court to stop (바카라 사이트˜restrain바카라 사이트™) your creditors from applying to wind up your company. You must do this within 21 days of getting the statutory demand.

Download and fill in application form IAA.

Which court you apply to depends on how much money shareholders have paid into your company by buying shares (바카라 사이트˜paid up share capital바카라 사이트™).

Check the Companies House register to find out your company바카라 사이트™s paid up share capital.

Your paid up share capital is less than £120,000

Use the to find a court dealing with insolvency. You must use the court nearest your company바카라 사이트™s registered office.

Your paid up share capital is more than £120,000

You must apply to the High Court.

The High Court
Companies Court
7 Rolls Buildings
Fetter Lane
London
EC4A 1NL

4. Getting a winding-up order

Your creditors can apply to the court to close down your company. They do this by making an application called a 바카라 사이트˜winding-up petition바카라 사이트™.

You can apply to stop your creditors from making a winding-up petition if you were given a statutory demand.

They can withdraw the petition if your company pays the debt or makes an arrangement to pay it.

Attending the hearing

If the petition is accepted, the court will arrange a date for a hearing.

You must attend the hearing. Your creditors will announce when and where the hearing will take place in .

Your company can be put into the control of someone else until the hearing happens. This is known as 바카라 사이트˜provisional liquidation바카라 사이트™.

If the court decides you cannot pay your debts

The court will issue a winding-up order.

An officer of the court (바카라 사이트˜official receiver바카라 사이트™) will be put in charge of winding-up your company. You must co-operate with the official receiver.

When you get a winding-up order:

  • your company바카라 사이트™s bank account will usually be frozen
  • its assets or property will be sold by the official receiver

If any part of your company is bought with the intention of discontinuing the business (not running it as a 바카라 사이트˜going concern바카라 사이트™) then your employees will lose their jobs.

You can be banned from being a director for up to 15 years if you do not carry out your duties properly.

Cancel a winding-up order

You can apply to cancel a winding-up order if you do not think you need to pay your creditors. You must do this within 5 working days of getting the order.