Winding up and Family Law

RobotToday has been another hectic day at Stowe Family Law LLP. From redrafting and preparing Form E’s to sifting through and organising masses of supporting documents sent over by the client I have been virtually non-stop. Early in the morning something interesting landed on my desk. I was asked to carry out some research with regard to winding up procedures and family law.


A winding up petition is a request to the Court from a creditor, in this case the HMRC, who is owed over £750 for the judge to close the company. Once a petition has been issued this must, by law, be published in the London Gazette and all other creditors have a period in which they can join the petition in order to hopefully realise the money owed to them. If the court agrees to close the company then it will issue a winding up order. The company will then cease to trade, its bank accounts will be frozen and an official receiver or liquidator will be appointed. The official receiver or liquidator will then investigate the company and the conduct of its directors. The assets will be liquidated to pay off the creditors,

Any obligation arising under an order made in family proceedings or any obligation arising under a maintenance assessment made under the Child Support Act 1991 is classed as a non-provable debt. ‘Family proceedings’ for this purpose is defined in section 281(8) of The Insolvency Act 1986 (a link to which is below). A creditor may only pursue a non-provable debt by obtaining a judgement at any time between the bankruptcy order and the bankrupt’s discharge, but they may only do this with the sanction of the court. There are a number of further steps that follow this but in summary the winding up of company belonging to the other side is unwelcome news, especially if the company is not a limited liability company, which in short means that the directors and shareholders are responsible for paying any debt incurred by the company out of their own personal assets. Therefore winding up would not only cause the loss of the company as an assets from which maintenance may be paid, but also the loss of numerous personal assets.

It’s not every day in family law that you get to delve in to company law but I doubt it will be the last time I have to dip in to other areas of law to best serve my future clients.

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