Notice of Winding Up Application

Received a Notice of Winding Up Application? Your company may be closed down if you don’t act quickly

A Notice of Winding Up Application is issued to the registered office of a company when a creditor has filed in Court an application to wind up a company. This normally takes place after a creditor obtains judgment debt or following failure for a debtor company to comply with a statutory demand within 21 days. Upon these events occurring, a creditor may issue proceedings in the Federal Court or the Supreme Court to wind up the company. The process for issuing these proceedings is brought under Section 459P of the Corporations Act.

There are other circumstances (less common) that may allow a party to initiate winding up proceedings.

If the Winding Up Application hearing takes place and the Court is satisfied that a company should be wound up, the Court makes an order for the company to be wound up and the Court appoints an Official Liquidator. Normally, the appointed Liquidator has provided a consent to be appointed prior to the hearing upon the request of the creditor (or their lawyers) making the Winding Up Application.

It is important that Directors are aware that once a Winding Up application commences, it is normally based upon an act of insolvency having taken place. If the Winding Up action is not dismissed and heard before a Court, the question of insolvency is usually taken into consideration.

If you have received a Notice of Winding Up Application or would like more information in respect to this document please contact Insolvency Choice today.