Sycamore's Caravansdon't settle for anything less

When is a winding up order issued?

A creditor can seek a winding up order against a company in order to collect an outstanding debt. Winding up orders are issued on serious matters and consume a lot of the creditor’s time and money and therefore, they should be taken seriously. Although the winding up option is available to every creditor, it is reserved as a last option. The main goal of a wind up order is the closure of the business leading to the liquidation of its assets. The proceeds from the sale of assets should be used to settle outstanding debts.  For the order to be issued, the creditors demand has to be deemed feasible. The creditors should also prove that they have used different methods in a bid to collect the debts and have failed. Finally, the creditors should prove that the business is relatively insolvent and there is no chance of recovery hence there is need for liquidation. Any other reason that shows that the business in question cannot pay its debts can result in winding up the company.