West London Law, have acted for for a diverse range of clients, including prominent entrepreneurs, directors of Fortune 500 companies, and SME owners.
Our founder, Gurvir Birang, is recognised as an expert in the field of insolvency and has a wealth of experience in defending statutory demands and petitions presented by creditors, including the HMRC.
We have been ranked repeatedly in the legal directories as leaders in bankruptcy and insolvency defence work.
If a person or a company owes money, the creditor can present make a formal statutory demand for the debt to be repaid. A statutory demand is a powerful weapon to wield – as it can be followed up 21 days with a bankruptcy petition (if served on an individual) or a winding-up petition (if served on a company).
The requirements for issuing a statutory demand are set out in the Insolvency Act 1986.
If the company accepts that the debt is payable, it should contact the creditor immediately and arrange to pay the debt.
There are two main situations under the Insolvency Act 1986 in which a company can be wound up:
The decision whether to wind up a company is ultimately for at court.
If a company disputes the debt in the statutory demand, it must file an application to set aside the statutory demand. The court will not action a winding-up petition if the debt is genuinely disputed on substantial grounds.
To successfully dispute a debt, the company must persuade the court. There is no liability.
If the company disputes the debt it is crucial to obtain legal advice immediately. You should consult Our solicitors to properly advise you Expert insolvency solicitors can take several steps in the company’s interest to protect it, from writing to the creditors and negotiating or applying for an injunction to prevent the presentation of a winding-up petition.
The company needs to put forward a defence or counterclaim to extinguish the debt or to raise a set off. These are all matters that an expert insolvency solicitor can discuss with you.
The consequences of a successful winding up petition are severe and include:
The petitioning creditor of a winding-up petition must give notice in the London Gazette. A winding-up petition may not be retracted following notification; it must proceed to court.
The petition will likely be drawn to the attention of the company’s bank and other creditors as well as possibly ( employees, suppliers, and customers.). This can lead to the company’s bank accounts being frozen and reputational damage for the company.
There are potential risks for the directors of the company. A director of a company in financial difficulties could face personal liability for:
You may be advised to apply for an injunction to prevent the winding up of the company where if the debt is disputed., a court injunction to prevent the petition being issued can be sought. An injunction application should succeed if:
The directors of the company should discuss their options with an expert insolvency solicitor, including that of a company voluntary arrangement (CVA), or applying for administration order “stay” i.e. to freeze the process preventing a winding up order and other court action by other creditors (except with permission of the court).
You should immediately seek professional expert help from expert insolvency solicitors to prevent your company’s bank accounts being frozen, reputational damage and your company being wound up.