The construction industry has suffered weak growth in October, adding to fears that the recent boom in construction may peter out. The construction purchasing managers index slipped from 53.8 in September to 51.6 last month. However, there has been a reduction in winding up petitions being advertised against construction companies. 72 winding up petitions were advertised in October, down from 86 in September. There is some variation in these figures month to month but overall there was an increase across all industries in the number of petitions advertised of 10.5%. It may be that a number of companies in the industry is starting to fall.
So what is a winding up petition and why is the advertisement of them important?
An application is made to the high court (PETITION) to ask the court to wind the company up on the basis that it is unable to pay its debts.
The main issue is that once a winding up petition has been advertised the business's bank account is usually frozen by the bank, whether it is in overdraft or not.
So take threats of winding up petitions very seriously! It does cost a creditor some £1800 to serve a petition (including court costs) but it can have devastating effect on the company.
If anyone has threatened a winding up petition then you must ACT. We may be able to stop the petition being advertised if one has already been issued.