Dos and Donts When a Winding Up Petition Knocks on Your Door

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Dos and Don ’ts When a Winding Up Petition Knocks on Your Door When a winding up petition comes a- knocking what is there to do Crazy fidgeting and impulsive decisions are surely off the table. You have to take this matter seriously as it can cause the demise of your beloved business and come catapulting with many other consequences. Now to manage such a case here is a list of do’s and don’ts for you to remember and follow.  Do seek professional advice and expert guidance. It is advisable that you hire the services of an insolvency and liquidation professional from whom you can seek advice from regarding the major decisions and plans that the entity has to do and face.  Do make a list of all possible business recovery options. This includes all the procedures requirements and tasks to be taken for each option as well as their costs pros and cons.  Do call for a board meeting. Such an important matter has to be decided by the entire board of directors. Such meetings must also be recorded to avoid wrongful accusation of illegal trading under full knowledge of insolvency.  Do open up lines of communication with creditors. Do not avoid calls or hide from them as that can only worsen things. Be open about meetings and talks to hear both parties fairly.  Do take a look at your financial records. You should also assess whether to not the petition has been done in validity or as a form of harassment or misunderstanding. To do so examination of one’s operations and records must be done.  Don’t allow the entity to incur any more debt. Unless you have a valid purpose for doing so such as the dire need to keep the company afloat never add up to your growing pile of liabilities.  Don’t ignore actions raised by your creditors. This does not only pertain to the winding up petition but also to every other recovery method employed by creditors to rightfully collect the dues owed to them by you.  Don’t allow resignation among directors. It is their responsibility to the company and even if liquidation may really be in tow it is their job to reduce any potential loss as much as they could.

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 Don’t delay any actions. When the court calls for and releases an order as action of the winding up petition brought up by creditors you will not be left with any choice but to forcefully liquidate. If you can do something early on do it.

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