Information about Winding Up Orders and Petitions
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Effect of winding up on employees
Employees will be made redundant
Winding up is the forced closure of a company. Anyone who is employed at the time the company is closed will be made redundant by the liquidator.
The liquidator may decide to keep on some or all of the employees for a period of time if this means that work in progress can be competed thus improving the value of the assets of the company for the creditors.
If you have received a winding up petition or have been threatened with one, call us now to discuss your options and how to save your company
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Solutions to stop Winding Up
Compare the alternatives
- Rescue solutions at a glance
Pre pack Administration
- Legacy debt written off
- Creditor action stopped
Company Voluntary Arrangement
- No additional investment
- No directors disqualification report
Voluntary Liquidation
- No significant upfront investment required
- Cash freed to run new business
Administration
- Creditor action stopped
- Business can be restructured
Because a company will normally only be wound up when it is insolvent, there will generally be little or no funds available to make redundancy payments.
If after the liquidator's fees, any funds are available, employees will be treated as preferential creditors and will be paid redundancy packages of up to £800.
If any employees are owed more than £800, these amounts are treated as unsecured debts and paid in the same preference to all other unsecured creditors. Unfortunately the company is not likely to have enough funds to pay its unsecured creditors and many employees will only receive a small % of what they are owed.
If you have received a winding up petition or have been threatened with one, call us now to discuss your options and how to save your company
