What is a closing request?
A bankruptcy (WUP) application is a legal notice given to a defaulting company, which risks the company’s assets to be liquidated by the designated legal recipient (OR) if the company has not been able to pay a debt of more than £ 750 within at least 21 days. The notice is issued after the HMRC or the debtor (your credit provider) has applied for a court order.
Keep in mind that the WIP application (WUP) is different from the closing order (WUO), the first is the first phase of the process and the last is the final stage.
What little can you do if your company gets WUP?
We recommend that you consult the key provisions of the Insolvency Act that apply when your company is registered under the Companies Act (2006). At the very least, you will know what to do and what not to do if the request for a supplement indicates stronger than you are concerned about. Dealing with an application for closure can be very stressful for owners, so it is advisable to consult a professional and advisor to find out what to do in this situation and how to avoid getting into further trouble. Your first point of contact should be your accountants who will be in the best position to guide you, or your business representatives once you have them.
What happens after WUP appears in your company?
Following the issuance of the closing notice, the London Gazette will issue an advertisement to inform its creditors. Your company account freezes immediately after the ad and needs a court order confirmation to open your company accounts. While the process itself is very expensive, it does not guarantee any success in restoring your company accounts. Usually you receive a legal claim before the closing notice is sent, be sure to clear your debt as soon as you receive a legal requirement to avoid getting a closing notice. If you do not have liquid money talk to your accountant or your account manager at your affordable accounting services to find the best way to get immediate financial access.
How is your communication affected?
Your company’s bank account transactions after the closing of the closure application can be recorded and at the risk of being controlled by legal recipients (OR) and financial operators, this can be used against you to pay that amount to the company.
Whether you plan to sell the company’s assets, legal receivers (ORs) or bidders may reject the tender and postpone the process after a thorough inspection, if the goods are proven to be unimportant or sold to a related party.
Is your ‘post-application status’ legally considered?
A ‘post-petition disposition’ that is the imposition of company assets made after the issuance of a liquidation application, is deemed void or void in terms of Section 127 of the Insolvency Act.
The company may resume business after the notice has been issued but your authority is limited as the issuers may control any payment you make to merchants.
Does the court allow you to seek any protection after WUP has been awarded to the company?
There is a misunderstanding that the directors of the notified company may want to protect themselves entirely from debt by showing them to be in error or in dispute on the day of the hearing. The court may decide to dismiss your application as it was late and give you a closing notice.
It is important to remember that you are not allowed to discuss issues regarding the application for closure on the day of the court hearing, so it may be best to resolve the issues by hand first.
What other options are you left with?
You have other options to consider once you have filed a closing application such as asking the applicant to suspend the appeal while you are willing to pay the costs of the process. You cannot expect your claimant to agree to your claim if your company is already insolvent unless your company is willing to voluntarily liquidate or legally ask lenders to repay the loan under the Company’s Voluntary Arrangement (CVA).
You can also obtain an Order Order, which allows licensed legal entities to manage your company and authorizes them to inspect and sell your company’s assets. During this process, your company will receive protection from legal orders and will be suspended from termination order against your firm to be issued by a court.
Your charted professional accountant is your advisor, talk to them and make sure you discuss with them all the options before proceeding with the decision.
You need to calm down!
There are many options available during the initial meetings with the applicant but once the notice is issued, things get more complicated. Therefore, it is best to consult a specialist in this matter and to conduct a personal study of the law.