Everything you need to know about winding up petitions. In but ka chon v interactive brokers llc 2019 hkca 873, the hong kong court of appeal dismissed an appeal to set aside a statutory demand arising out of online forex futures trading debts. Ordinarily, under the ca 2016, a creditor could issue a winding up notice, known as a statutory demand, for a sum of rm10,000 or more. The minimum qualifying indebtedness to serve a statutory demand for payment is increased to 10,000 a single creditor and to 20,000 in aggregate for two or more creditors. Statutory demand vs winding up petition real business rescue. It may be that the petitioner has obtained a judgment against a company. It may be used as the basis for an application for a petition to wind up a cayman company.
No if, no but will an arbitration agreement always trump. You can apply to the court to close or wind up a company if it cannot pay its debts. However, a winding up petition is more hard hitting than a statutory demand and can immediately get a debtors attention and far quicker than may be the case with a statutory demand. Issuing a written demand for debt repayment to the target company. Deregistration of defunct private company s291aa of companies ordinance co a. A statutory demand is a formal demand for payment which, if it remains unpaid for more than three weeks, can be used to support a winding up petition. Neither a statutory demand, nor a winding up petition will come out of the blue. As far as companies are concerned there is no requirement to issue a statutory demand prior to issuing a winding up petition. Presenting a winding up petition to the court and the company note court hearing for the petition. The preceding statutory demand is issued by the creditor themselves and 21 days must pass before they ask the court to issue the winding up petition. You can present a windingup petition without serving a statutory demand if. If you owe a company money and are unable to pay it, you should be proactive at an early stage to stop the situation escalating out of control. How to issue a statutory demand and winding up petition. By section 1231a of the act, a company will be deemed unable to pay its debts if a debt is not paid for three weeks following a creditor presenting a statutory demand.
Anyone whos owed money the creditor can make a statutory demand. Official receivers office simple guide on compulsory. If you have received a winding up petition or a statutory demand for payment against your company then time is of the essence. Under these circumstances, you can issue a creditors winding up petition for a court order that forces an insolvent company into compulsory liquidation. Threat to wind up where there is no dispute of a debt. Corkery, j f winding up by the court for inability to pay debts. Citation and commencement of the companies winding up rules, 2018 1 these rules shall be cited as the companies winding up rules, 2018. How to respond to a winding up petition gowling wlg. Get professional insolvency advice immediately as a wup. As a company creditor, presenting a winding up petition to close a company down is a technical process, but given the severity of the potential repercussions for the debtor, its only right this is the case. Does a creditor have to serve a statutory demand before issuing a winding up petition. If a creditor already has been successful in obtaining a county court judgement against your company for an unpaid debt, they could if they were so minded, go straight to issuing a winding up petition without the need to serve a statutory demand. A winding up petition is a court order that forces an insolvent company into compulsory liquidation its wrong to abuse a winding up petition as an instrument of debt recovery.
The statutory demand would provide the debtor company with 21 days to pay. An analysis of judicial approach to disputed debts in. A winding up petition is something to be taken seriously. Statutory demands for restructuring and insolvency professionals. Liquidation statutory forms department for the economy. You can present a windingup petition without serving a statutory demand. In doing so, vicepresident kwan of the court of appeal made obiter comments on the circumstances in which a winding up petition. A statutory demand can be used as evidence that a company is unable to pay its debts and, if the demand is not challenged, that the debt is not.
A cautionary note comes from australia, where a minimum 20k debt is now required for a winding up petition and the statutory demand. Instead these are the final steps in what is often a lengthy process chasing up a nonpaying customer or client. Company winding up proceedings the winding up or liquidation of a company is the process by which a companys assets are collected and sold in order to pay its debts. If the debtor pays the winding up petition debt or part of it, you have a good argument for payment of the winding up petition. Additionally, a statutory demand must include a statement that if payment is not made within 21 days of the date upon which it is served on the company, the company will be deemed to be insolvent and a winding up petition.
If the debt is not settled, a winding up hearing will take place and the court will decide whether a winding up. A statutory demand can be used as evidence that a company is unable to pay its debts and, if the demand. You can get a general picture on the winding up procedures except voluntary winding up from the following chart. The threat or implied threat of a winding up petition. The companies winding up rules 2008 as amended provide guidance as to the form and content of a statutory demand. The persons who provided funds to the company to discharge costs, charges or expenses of the winding up. This means you have grounds to issue a winding up petition against a company or bankruptcy petition against an individual. Do winding up petitions require a statutory demand. The statutory grounds for winding up for insolvency section 3642 s 2222 uca.
A guide to statutory demands in the context of personal and corporate insolvency. If the debts over 6 years old, you cannot usually make a statutory demand. Statutory demand and windin g up petitions ordinarily, a statutory demand is a precursor to a winding up petition when used against a company. Blank winding up petition form winding up petition. A statutory demand is often issued with the intention to go on to present a winding up petition. Winding up applications relying on failure to comply with statutory. As the creditor will have to pay for the court to do this, winding up petitions. You can present a bankruptcy petition without serving a statutory demand if. A statutory demand is often issued with the intention to go on to present a winding up petition if the debt is not paid. You need to fill in forms and send them to the right court to apply to wind up a company. Get professional insolvency advice immediately as a wup will not just restrict a companys ability to function but could also have personal liability implications which could negatively impact your future life and career prospects. Your application to the court is known as a windingup petition. Winding up proceedings based on an unsatisfied statutory demand about this information sheet this information sheet has been prepared for litigants who intend to make a winding up application pursuant to s459p of the corporations act 2001 cth based on a companys failure to comply with a statutory demand. A party who is aware of an intention to file a winding up petition against it following the issuance of a statutory demand may seek for an order of interlocutory injunction against the.
Circumstances in which a company may be wound up by the court 187. If the debtor does not pay or apply to have the statutory demand set aside, the creditor can file a bankruptcy petition. Zoldissue and defend a winding up petition insolvency. You can make a statutory demand to ask for payment of a debt from an individual or company. Winding up petition the process starts with the presentation to the court of a winding up petition. Breyer group plc v rbk engineering ltd 2017 ewhc 1206 ch is a useful illustrative example of the companies court refusing to allow a winding up petition to continue where the status of the. Guide to statutory demands for those presenting and. Simple guide on compulsory winding up of companies pdf download. Opposing applications to wind up a company in insolvency. Alternatively, it may have served a statutory demand. Whilst a statutory demand is not a necessity prior to issuing a winding up petition. Failing this, the creditor could file a winding up petition. Make and serve a statutory demand, or challenge one gov.
Issuing a statutory demand before serving a winding up petition. If, after three weeks, the debt hasnt been paid you can use the statutory demand as evidence that your client is insolvent. The creditor has served on the debtor a statutory demand and the debtor has not complied with. The insolvency rules detail the content that needs to be included in the winding up petition. A procedural guide to compulsory liquidation in hong kong. If instead of adopting that course the creditor takes the shortcut of serving a statutory demand with a view to presenting a winding up petition without having obtained a judgment, in my. A statutory demand is usually the first step a creditor will take to let a debtor company know it is serious about recovering a debt and is prepared to take legal action. This includes guidance on when a statutory demand may be used against a company or an individual, how to draft and serve a statutory demand, the potential consequences of serving a statutory demand and the requirements for presenting a bankruptcy petition or winding up petition. We are also monitoring for any increases in winding up threshold and statutory demand period. Company winding up proceedings supreme court of singapore. The latter is suitable for speedy proceedings when a demand has not been. The most severe action that an unpaid creditor can take against a limited company that refuses to pay an undisputed debt is to issue a winding up petition. Winding up an insolvent unregistered company the gazette. An overview of statutory demands in the cayman islands.
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