You can apply to the court to close or ‘wind up’ a company if it cannot pay its debts. This is also known as compulsory liquidation.
To wind up a company you must:
- be owed £750 or more
- be able to prove that the company cannot pay you
You need to fill in forms and send them to the right court to apply to wind up a company.
Your application to the court is known as a ‘winding-up petition’. If you’re successful:
- the company assets are sold
- any legal disputes are settled
- the company collects money it’s owed
- funds are paid to you and any other creditors
You might not get all or any of the money you’re owed.
The fees are:
- £280 – court fees
- £1,600 – petition deposit (to manage the ‘winding-up’)
You might be able to get the fees back if the company can afford to repay them.
There are different rules on winding up a company in Scotland.
Story originally appeared on fca.org.uk