Printer Friendly

Tough line on payment.

Byline: Helen Logan

A survey of UK companies by the Better Payment Practice Group (BPPG) has found that four out of five have successfully issued a winding up order.

These can be issued to put a business into compulsory liquidation when it does not pay its debts.

The poll, which was held on the BPPG's website, www.payontime.co.uk, asked businesses if they had ever issued a winding up order and if so, if it was successful.

Of the 370 respondents, 27pc had issued an order and of those, 82pc were successful.

Philip King, member of the BPPG and director general of the Institute of Credit Management, said: "Winding up orders should be seen as a last resort and only used when other collection methods have proved ineffective.

"It is also sensible to serve a Statutory Demand on the company first.

"This is free, save for the cost of preparation, and failure to comply with a Statutory Demand within 21 days is an automatic ground for winding up.

"If a company is solvent, the mere threat of winding up is often effective in getting them to pay what is due.

"However, as the poll shows, issuing a winding up order against a company can be an effective method to obtain payment of outstanding debts.

"It works by winding up the debtor company if payment is not received within 21 days and then using its assets to pay those who are owed money.

"However, if the company is insolvent when it is wound up, there are unlikely to be sufficient assets to pay all creditors in full, and only a proportion of the outstanding debt will be settled.

"In addition, court fees have to be paid to bring an action and, although the court will add these to the amount owed, there is no guarantee that they will be recovered."

For further information on Statutory Demands or winding up orders, see the Better Payment Group website, www.payontime.co.uk.
COPYRIGHT 2006 MGN Ltd.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2006 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Title Annotation:Business Weekly
Publication:Evening Gazette (Middlesbrough, England)
Date:Jul 4, 2006
Words:330
Previous Article:North-east execs top for job change.
Next Article:The sweet scent of success.
Topics:

Terms of use | Privacy policy | Copyright © 2020 Farlex, Inc. | Feedback | For webmasters