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Chapter 11

Effect of winding-up

The winding-up petition has the following effects:

 All actions for the recovery of debt against the company are stopped.

 Any floating charges crystallise.

 Any legal proceedings against the company are halted, and none may start
unless leave is granted from the court.

 The company ceases to carry on business except where it is necessary to
complete the winding up, for example to complete work-in-progress.

 The powers of the directors cease, although they still continue in office.

 The employees are automatically made redundant, but the liquidator can re-
employ them to help him complete the winding-up.

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