The following Restructuring & Insolvency practice note Produced in partnership with Eleanor Holland and Karl Anderson of 4 Stone Buildings provides comprehensive and up to date legal information covering:
STOP PRESS: The Corporate Insolvency and Governance Act 2020 contains provisions which, on a temporary basis (presently until 31 December 2020) impose significant limitations on the ability for a creditor to seek a winding-up order against a company. For further reading, see Practice Note: Corporate Insolvency and Governance Act 2020—temporary changes to corporate statutory demands and winding-up petitions.
This Practice Note provides guidance as to the practice and procedure which applies on the winding up of a company (the debtor) pursuant to a creditors’ winding-up petition.
The most common circumstances in which a winding-up petition will be issued are:
where a creditor has served a statutory demand on the debtor and the 21-day period has expired without the company paying, securing or compounding the sum so due (see Practice Note: Company statutory demand—the position under The Insolvency (England and Wales) Rules 2016). Note, however, that it is not necessary to issue a statutory demand before presenting a winding-up petition, but it is merely one method of demonstrating that a company is unable to pay its debts
where a creditor has a judgment in its favour and has issued execution against the debtor, which is returned unsatisfied, either for the full amount or part of the judgment debt
where it is proved to the satisfaction of the court that the debtor is unable to pay its debts
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