Unpaid debts can put a limited company at risk of a winding-up petition, potentially leading to liquidation. Creditors may act via court judgments or statutory demands, forcing companies to settle debts. Learn how this process works and the consequences for the business.

A limited company that has unpaid debts, beyond their normal agreed payment terms, can face a precarious future. The people or organisations that are owed money may be able have the company wound up (dissolved) by applying for a winding-up petition. This is a drastic measure and can lead to the company in question being liquidated. This action, by the creditors, can be a powerful motivator for the company to settle its debts before the process is completed.

The creditors can start this process by either:

• Obtaining a court judgment. A company has 14 days to respond to a court judgment. If the company does not respond to the court judgment within 14 days, the creditors can apply to have the assets seized by a bailiff or sheriff.
• By making an official request for payment – this is called a statutory demand. A company has 21 days to respond to a statutory demand. The creditors can apply to wind up the company if the company does not respond to a statutory demand within 21 days.

If the court grants the winding-up petition, a liquidator is appointed to sell the company’s assets and pay off creditors. However, unsecured creditors are unlikely to receive full payment, depending on the company's assets.

When a company enters administration, liquidation or receivership, the appointed Insolvency Practitioner is required to post announcements in the London Gazette.

A significant amount of online information about companies is available to the public on the Companies House website. The information available through Companies House can be an important resource for anyone looking to research a company. What makes this particularly valuable is that a significant portion of the data is freely available to the public.

The range of publicly available information can be used for various purposes, including due diligence, background checks, and monitoring the financial health of companies.

Among the key details that can be accessed through Companies House are:

• Company Information: This includes basic but essential details such as the company’s registered address, its date of incorporation, and its status.
• Company Officers: You can access a list of current and resigned officers of the company, which includes directors, company secretaries, and other key individuals.
• Document Images: Companies House maintains a digital archive of official documents filed by companies, such as annual accounts, articles of association, and resolutions.
• Mortgage Charge Data: For companies that have taken out loans or entered into security agreements, information about mortgage charges is available.
• Previous Company Names: If a company has changed its name in the past, this information is also made available.
• Insolvency Information: Companies House also holds records of any insolvency proceedings.

In addition to this, Companies House offers a convenient service where individuals and businesses can set up free email alerts. These alerts notify you whenever there are updates to a company’s details, such as a change in director or registered address.