The use of winding up petitions has been suspended until 30 September 2021 and it is expected that once the restriction ends, the numbers will be higher than usual.
Having one served isn’t the end of the company as there are still options, though the time to take them is greatly reduced.
Once the petition is served, the directors should carefully consider decisions they take in the company as some transactions could be made void by a subsequent liquidation
An example would be repaying the directors loan account which would need to be repaid in the liquidation
Without going into a massive amount of detail and in no particular order as some may be considered together
Apply for an adjournment – this will allow time to find another solution to the problem
Reach an informal deal with the creditor to repay ideally before the petition is advertised – this could be a one off payment or instalments though they may want paying over a short period of time
Propose a Company Voluntary Arrangement (CVA) with your creditors – this will need an adjournment and will need accepting by creditors including the petitioner
Apply for an Administration Order – this will protect the company from legal action such as a petition. The exits from administration could be a CVA or a sale of the business
Dispute the debt – you may also need to apply to court to stop the petition being advertised. It must be a proper dispute and not a time buying exercise
Put the company into creditors voluntary liquidation – he outcome is the same, liquidation of the company, though some directors feel that they are able to represent their view more in this process