Association of Chartered Certified Accountants (ACCA) Certification Practice Test

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How much must a creditor be owed to petition the court for a compulsory winding up order?

£500 outstanding for 3 weeks
£750 outstanding for 3 weeks
£1,000 outstanding for 1 month
£1,500 outstanding for 2 months

The correct answer is: £750 outstanding for 3 weeks

To petition the court for a compulsory winding up order, a creditor must be owed a minimum of £750 that has remained outstanding for at least 3 weeks. This amount reflects the legal threshold set out in company insolvency laws, ensuring that only significant debts qualify a creditor to seek such drastic measures against a company. Compulsory winding up is a serious legal action that results in the dissolution of a company, so the law requires creditors to have a substantial claim before they can initiate court proceedings. Although other amounts are mentioned in the choices, they either do not meet the minimum requirement of £750 or specify longer periods that do not align with the necessary timeframe for petitioning the court effectively.