There are several ways in which a party can file an application to have your company wound up.
By far the most common is on the grounds of insolvency for failure to comply with the statutory demand.
If you claim your company was not served with a statutory demand, the winding up application can be opposed on that basis. Please note detailed evidence will be required to demonstrate in fact no such statutory demand was ever served. We have won several cases, especially in the Federal Court on exactly this ground.
If, however, your company was served with the statutory demand, you generally need to prove that the company is solvent. This means demonstrating, from a cash point of view, it can pay its debts as and when they fall due. This sort of application is expensive and often requires accounting or forensic accounting evidence. Again, we have had experience in demonstrating that companies are solvent in both the Federal and state Supreme courts.
The other major ground these companies are wound up is on the basis that it’s just and equitable for it to be wound up. This is really a catchall provision where a party alleges that the company is not being run properly and the conduct complained of is serious enough for a Court to appoint a liquidator over the company.
The most common situation in which this occurs is in director and shareholder disputes. In those circumstances, there are a number of other options you can look at to try and resolve these sorts of disputes without incurring the costs of a liquidator being appointed and of course the reputational damage to your company.
If your company has been served with a winding up application, it is important you get urgent advice as to the consequences of that application and whether or not it is capable of being resisted.
Contact us today for advice on the solvency of your company.