01 May 2020

Critical business protection during Covid-19

Critical business protection during Covid-19

During these challenging times, having appropriate business protections in place is crucial, writes Leona Duff.

In the current climate, many businesses are experiencing difficulties meeting payments due to creditors.

Under section 122 of the Insolvency Act 1986, a creditor can of course petition for the winding up of a company in the event that it is unable to pay its debts.

Now is perhaps more than ever a time to be cautious about the implications of this section.

The failure to comply with a demand for payment - for example a Blue Star letter - could leave your company exposed to the risk of insolvency proceedings being raised without your knowledge.

Such issues may be compounded by - or even caused by - the ongoing disruptions and delays we are experiencing in the Covid-19 environment.


A way in which you can obtain a layer of protection for your company is by having caveats registered. A caveat will provide advance warning that court orders (including orders sought for the appointment of a provisional liquidator) are being sought against your company, giving you crucial time in which to seek legal assistance.

In the absence of a caveat, the court can grant orders against your company without your knowledge and without your side of the case being heard.

How we can help

Aberdein Considine can assist by having caveats registered at the Court of Session or Sheriff Court at a competitive cost. Click here for more information.

If this is of interest to you, please do not hesitate to contact us.

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