I have just received a Winding up Petition, what do I do?

Uncategorized Sep 09, 2019

A Winding up Petition is essentially an application filed in an Insolvency Court for a Company to be Wound Up, which means placed in Compulsory Liquidation. While many Petitions are applied for by creditors out of frustration due to being ignored or a failure to agree payment terms, a Winding Up Petition involves a formal Court driven process and should not be ignored.

Early action by directors is essential if they want to save their company and avoid personal liability.

It should be pointed out that directors continuing to trade a company when it has no prospects of survival can be held personally liable for liabilities created after the point when they ought to have realised there was no prospect of survival.

While most guides to Winding Up Petitions are aimed at creditors who are owed money and deal with the criteria for submitting a Petition, I've produced this guide which is aimed at helping directors save their business with this section aimed at helping survive a Petition.

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The change to HMRC preferential creditor status v emphasising insolvent business restructure

The Government’s proposal to restore HMRC preferential creditor status when a business becomes insolvent is, in my view, at odds with its desire to shift the balance in the insolvency regime towards helping more businesses to survive.

In September 2018 I welcomed the Government’s newly-published proposed changes to the insolvency regime, whereby there would be a moratorium, initially 28 days, from filing papers with the courts to give still viable businesses more time to restructure or seek new investment to rescue their business free from creditor action. Consultation on this and other changes to the insolvency regime was begun in 2016.

This year, in the April 2019 budget statement, the then Chancellor Philip Hammond included a proposal to restore HMRC preferential creditor status, something that had been removed as part of the Enterprise Act in 2002. The new preferential status will apply to VAT, PAYE income tax, employee...

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The current state of UK commodity prices

brexit economy Sep 03, 2019

Ongoing fears of a global economic recession, not to mention the escalating trade war between the USA and China, are having an impact on commodity prices.

August has been a particularly torrid month, according to analysts, with iron ore prices in particular suffering a sharp drop – up to 30% according to a report in the Financial Times, although other sources also back this up.

The ongoing uncertainty has also had its effect on oil prices, with OPEC cutting production while the USA has increased theirs. This has had its impact on the futures price of oil, with Brent Crude for October falling 31 cents, or 0.5%, to $60.18 a barrel.

According to the latest analysis from Marketwatch.com, published on August 30, “Commodities will end August with a second straight monthly loss”.

It says that the S & P GSCI index, which tracks 24 commodities across five sectors was down by more than 4% at the end of August, following a fall of 7% in July.

Gold and Silver prices, on...

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SMEs, start-ups and ethical fundraising

Fund raising can be a challenge for SMEs and start-ups but there are signs that many are turning to ethical fundraising for their money.

This growing trend is particularly pronounced among younger business founders and entrepreneurs, many of whom are reportedly shunning the venture capital routes that focus primarily on forcing them to grow as fast as possible to generate returns.

With the issues of global warming, climate change and damage to the environment being a major factor among young people it is no surprise that ideas of sustainable growth and ethical sources of finance should be so appealing.

But are they narrowing their options by focusing on ethical fundraising and risking their prospects for growth and possibly their business survival?

It would seem not, according to analysts, as there is also a growing movement among investors, particularly retail investors, to search for investment opportunities specifically with ethical funds.

Lisa Ashford, chief executive of Ethex,...

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Is gender parity in business a utopian dream?

employees women Aug 27, 2019

Rarely a week goes by when some aspect of gender parity often defined as equality is not in the headlines.

Back in April, just ahead of a Government deadline for firms to report on the gender pay gap within their businesses, the BBC reported that nothing much had changed since the initiative was announced.

Its analysis revealed that fewer than half the UK’s biggest employers had succeeded in narrowing their gender pay gap. In fact, in 45% of firms the discrepancy in pay increased in favour of men and overall in 75% of businesses the gap was in men’s favour.

By July, the focus had shifted to the representation of women on the boards of FTSE100 and FTSE 350 companies. While representation of women on FTSE100 company boards had improved since 2011, from 12.5% to 32% according to the Hampton-Alexander review, many of the leading broadsheets were accusing businesses of adopting what they called a “one and done” policy and that any such “improvements”...

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Post Brexit boom sectors – business opportunities

brexit sme smes Aug 22, 2019

It is often said that there are winners and losers for every significant event, so which are the post Brexit boom sectors likely to be?

Perhaps the most obvious ones are likely to come from the increase in regulation and compliance requirements for businesses, particularly those in the export sectors.

It is in this area, according to IW Capital, there are opportunities for companies that can devise technology to reduce the amount of time businesses will have to spend on complying with the inevitably more complex requirements that will be imposed by other countries within the EU, but also more widely as businesses explore markets they have perhaps not previously considered.

The exchange rate is likely to have the greatest impact on winners and losers.  Therefore, firms that supply essential goods and services with UK supply chains whose costs are not affected by exchange rates and who do not rely on foreign labour ought to be huge beneficiaries, especially when their...

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UK productivity – is it time to move to a four-day working week?

economy productivity Aug 20, 2019

The UK’s comparatively low productivity and how to improve it has long been a source of debate and analysis.

The ONS (Office for National Statistics) has reported a reduction in UK productivity for three successive quarters and according to the Resolution Foundation productivity is now 28% below the average rate before the 2008 financial crisis.  Yet this is a time when employment levels in the UK are the highest they have ever been.

Business productivity has traditionally been calculated by dividing average output per period by the total costs incurred (capital, energy, material, personnel) consumed in that period and is used as a determinant of efficiency.

Productivity in both national economies and individual businesses is much scrutinised by governments, business commentators and business owners as an indication of performance, efficiency and economic health.

All of this is based on the assumption that perpetual growth and competition are the cornerstones of...

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Work experience – between a rock and a hard place

employment Aug 15, 2019

Earlier this year the Federation of Small Businesses (FSB) called for compulsory work experience to be reintroduced for all children aged 14 to 16.

The Government ended schools’ obligation to provide compulsory work experience in 2012.

Since then, although many schools do still try to arrange some work experience, the responsibility for finding placements has rested largely on parents and pupils themselves.  In fact, according to the organisation Changing Education “Ofsted has identified that 75% of schools are failing to provide adequate work experience programmes”.

In 2015 the British Chambers of Commerce (BCC) questioned the wisdom of the 2012 decision, following a study of members that found that “most firms and education leaders believe secondary schools should offer work experience for under 16-year-olds”.

John Longworth, who was then the director general of the BCC, said: “Business and school leaders are clear – we won’t...

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The current state of the commercial property sector

brexit economy Aug 13, 2019

With economic uncertainty prevailing both globally and in the UK it would be no surprise if the commercial property sector was facing some difficulties.

The commercial property sector covers Community, Education, Hotel, Healthcare, Office, Retail and Industrial and it is clear from some of the statistics that the woes of retail have been acting as a drag on the sector as a whole.

Jones Lang LaSalle (JLL) provides information on property and investment opportunities and in its most recent analysis on new construction starts it revealed that they fell in the first quarter of 2019 for the first time since Q2 2017.

It reports that the ongoing uncertainty “dampened UK commercial real estate transactional activity in Q2, with investment volumes slowing to £8.9bn. This represented a 22% decline on the first half of and was the slowest first half of the year since 2013.

However, it reports, Alistair Meadows, Head of UK Capital Markets, believes that...

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Dream Big – Summer is time for considering a start-up

entrepreneur Aug 08, 2019

As many as half of all workers seriously consider setting up their own business during the summer holiday according to research.

Emma Jones, founder of small business support network Enterprise Nation, said: “The combination of sun, sand, sea and downtime means we’re more relaxed and have time to contemplate what we want.”

Relaxing on a beach with time for reflection can make us aware of any dissatisfactions with our current status or job.  It is also an opportunity to think what else you might do if stuck in a rut and you want to “take back control” of your life.

But what is involved when starting up a new business?

The key is to identify a clear purpose and define the product/market mix for your business, essentially to be able to answer “why” questions. This may require research but you cannot start planning until you have a clear purpose. Turning dreams into reality is more than simply having a good idea!

To help you find your...

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