In this blog, we’re discussing why winding up searches and full insolvency reports are essential for professionals providing due diligence checks on behalf of their clients. We will explore the benefits of conducting winding up searches and how they can help businesses and professionals make informed decisions, avoid financial risks, and protect their interests with the help of CRO™.
What Are Winding Up Searches?
Winding up searches are checks on a company name at the Insolvency and Companies List (formerly known as the Companies Court) to determine whether any pending winding up petitions are registered against that company. The report will contain details of any pending winding up petitions and any notices of intention to appoint an Administrator, notice of appointment of an Administrator, administration order and application for the making of an administration order that appears on the records, together with a summary of any previous withdrawn or dismissed petitions filed in the last 36 months.
What Are Full Insolvency Reports?
- Winding Up Search – as detailed above.
- The Gazette – checks for and lists any published insolvency notices on the official public record.
- Companies House Check – checks for and provides copies of all relevant insolvency and related documents at Companies House. It also provides the official filing history and a full company profile.
The Importance of Winding Up Searches
A court search helps to ensure that all legal requirements have been met. Here are some reasons why winding up searches are important:
- Compliance with legal requirements. If a winding up petition is filed at the Insolvency and Companies List (formerly Companies Court), the only way to find this out is to conduct a search at the court. A winding up petition will not appear on the records or filed documents of a company at Companies House unless it is turned into a winding up order by the court.
- Protection of stakeholders. Winding up searches help to protect the interests of stakeholders, including company purchasers, company mergers, employees, shareholders, and creditors.
- Peace of mind. By carrying out a winding up search or full insolvency report on a company, stakeholders will have the peace of mind that proper due diligence has been carried out from a legal standpoint.
In summary, winding up searches and full insolvency reports are an important step in the process of finding out whether a company has any adverse entries listed against it.
The Consequences of Not Conducting a Search
Conducting winding up searches is crucial in legal and business dealings, as failure to do so can lead to financial and legal consequences. For example, if a company is in the process of being wound up, it cannot enter into new contracts, and if a party enters into a contract with such a company, the contract may be invalidated, leaving the party unable to enforce its terms. Additionally, assets of a company being wound up may be sold to pay creditors, and purchasing these assets without conducting a winding up search may lead to the loss of the investment. Moreover, directors of a company being wound up may be personally liable for the company’s debts, and parties who enter into a contract with such a company may become liable if the contract is found invalid. Lastly, failure to conduct winding up searches when required by law can lead to legal penalties, fines, or even criminal charges.
How to Conduct a Winding Up Search
As mentioned, here at CRO™, we can conduct winding up searches on your behalf. Our team of highly trained and experienced searchers will thoroughly search the Insolvency and Companies List (previously known as the Companies Court) to determine if there are any pending winding up petitions against a particular company. The search report will include comprehensive details of any winding up petitions, notices of intention to appoint an Administrator, appointment of an Administrator, administration order, or application for making an administration order that is present in the records. Additionally, the report will summarise any previous withdrawn or dismissed petitions filed in the last 36 months. We aim to deliver the results of the winding up searches within 30 minutes for any business day between 10.00am and 4.30pm.
So, if you are interested in this service, allow us to take away the burden and complete the searches for you. Please don’t hesitate to enquire now so we can begin as soon as possible.