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Section 127 applies to compulsory liquidations.
(Section 284 contains similar rules but
that section deals with cases of personal bankruptcy)
Section 127 provides a hard hitting rule
which impacts on many transactions that take place between:
- the date on which a winding
up petition is issued (ie date stamped) by the court and
- the later date on which the
court "hears" the petition and makes the winding
up order.
In that period:
- any disposal of company property
and
- any transfer of company shares
will be of no effect, unless the
court orders otherwise.
Clearly, if your company has a
winding up petition issued against it the earlier you take
professional advice, the better.
A "disposal of company property"
includes cheques paid out by your business!
For instance, if you paid
a supplier £7,000 during the section 127 period, that
sum would probably be recoverable by the liquidator.
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