HomeFWJ TakeawayWinding up petitionsDefending a winding up petitionWhy would a business bank account be frozen?

If your bank account has been frozen, it is very important to try and establish as quickly as possible why that has happened.

In our experience at Francis Wilks & Jones, normally it relates to one of two particular reasons: 

A winding up petition has been issued

The first reason is that a winding up petition or winding up order may have been issued against the company in respect of a debt recovery claim.

This can either be by a creditor or an HMRC winding up order.

  • if this happens, then it will soon come to the attention of the company’s bank and the bank will then take the immediate step of putting a freeze on the bank account;
  • this is because the bank does not want to be held liable for any payments being made out of the account after the winding up petition came to their attention. 

If this does happen and your business bank account is frozen there are steps that can be taken to unfreeze the business bank account. These normally relate to making an application to court for a validation order pursuant to Section 127 of the Insolvency Act and our validation orders team at Francis Wilks & Jones can help guide you through this process

A freezing order or freezing injunction has been issued

These are much more serious situations as the courts rarely grant freezing orders.

The court only grants freezing orders where allegations of wrongdoing or dishonesty have been made against the company. And a belief that the company is about to dispose of its assets or make itself judgment proof.

In those circumstances, the court might can make a freezing order. If one is granted it is normally with no notice to the company but one of the service provisions relating to the freezing order is that the applicant must then serve it on the company’s bank.

  • once a bank receives the freezing order it tends to simply freeze the entire bank account even though it is technically not supposed to do this;
  • in these circumstances Francis Wilks & Jones can help you unfreeze the account so that you can continue to trade;
  • a freezing order should never be used to stop a company trading and there are strict provisions relating to this.

Payments in and out of the business in the ordinary course of trade are permitted although the bank tends to take a “one size fits all” approach and freeze the account. If you find yourself in this difficult position, we can help you not only with the freezing order side of things but also looking to get the bank account unfrozen quickly. We have the right contacts in various banks and can speak to their legal team and explain why the account should be unfrozen.

Whatever your issues relating to freezing of business bank accounts, the team at Francis Wilks & Jones can assist you. Do not hesitate, contact one of our experts on frozen bank accounts now and we will help you.

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