Winding up notice

[Tisme1]

I'm not clued up on this and it's not me so will try to explain as best I have been told. Im trying to understand and help someone this is what ive been told. The business has a winding up notice on it the business bank accounts all frozen. How is someone suppose to live if they can't trade. The business has money owed in which will clear all debt. However money can't be paid into the frozen account? No validation order as that would take 3 months?. I don't understand this. There's nothing underhand just a case of a creditor being paid late as another who owed hasn't paid up. Currently the person who's business it is family have no money at all to live on. Any advice and does this sound correct as I would expect money still allowed to be paid in

[atticus]

This is an insolvency law question.

It appears that a winding up petition has been issued against a company, and that the petition has been officially advertised.

s127 Insolvency Act 1986 says that after presentation of a winding up petition a company may not dispose of its assets unless the court permits. Banks check the official Gazette, and this is why they freeze the bank accounts of companies.

Why is the law like this? A company that is insolvent by definition cannot pay its debts. Interests of creditors need by law to be protected.

You might be able to apply to the court for an under under s127 Insolvency Act 1986 permitting certain payments out of the bank account. You would need to give very good reasons.

You should seek professional help if you are thinking of going down this route.

[Tisme1]

So are payments allowed into this account from companies the owe money. As apparently I've been told the bank will not allow any payments in. Ironically this will resolve the issue.
Also with the bank account being frozen no money can be taken out which is understandably so how are is the owner of the business suppose to live and feed his family ?

[atticus]

Q1 -Yes.

Q2 - This is the company's money, not that of its shareholders. On insolvency the directors' main obligations are to creditors.

[Tisme1]

Q1. This is the part I don't understand. They are saying the bank will not allow money paid into business bank from creditors as the account is frozen. Could that be happening
Q2 If the owner of the business has no money and his family need to pay household bills where do they get money bank frozen

[atticus]

I get the impression that there is rather more to this than is being told. As I said

- You might be able to apply to the court for an under under s127 Insolvency Act 1986 permitting certain payments out of the bank account. You would need to give very good reasons.

- take professional advice,

[Tisme1]

That's my opinion too. Its not me I am asking as I don't understand the story I'm being told.