What to do if your company has a winding-up petition
A winding-up petition is the most serious action a creditor can take, and the days before the hearing are when the most can be done. Here is how the process works and how to respond.
What is a winding-up petition?
A winding-up petition is a formal application to the court by a creditor asking for a company to be wound up and closed because it has not paid a debt, and it is the most serious action a creditor can take against a company. It is usually the final step after a debt of £750 or more has gone unpaid and demands have been ignored.
If the petition succeeds the court makes a winding-up order, the company is placed into compulsory liquidation, and control passes to the Official Receiver. Acting in the days before that happens is what gives a director the most options.
What happens after a winding-up petition is issued?
A winding-up petition follows a fixed and fast timetable, and each stage narrows the options, so the dates matter. The most damaging moment is advertisement in the Gazette, because it alerts the bank and other creditors.
- Petition served. The petition is delivered to the company registered office and a hearing date is set, often around 8 weeks ahead.
- Advertised in the Gazette. Seven business days after service the petition can be advertised publicly, which usually leads the bank to freeze the company accounts.
- Hearing. At the hearing the court decides whether to make a winding-up order.
- Winding-up order. The company enters compulsory liquidation, the directors lose control, and the Official Receiver takes over.
What should I do if my company receives a winding-up petition?
The single most important step is to take advice from a licensed insolvency practitioner immediately, because the options to stop or respond to a petition shrink with every day that passes. Once the petition is advertised and the bank account is frozen, some routes close for good.
Depending on the position, the realistic responses are usually one of these.
- Pay or settle the debt, if the company can, before the petition is advertised.
- Dispute the debt, where it is genuinely disputed on substantial grounds, and apply to court.
- Propose a company voluntary arrangement or seek administration where the business is viable and worth rescuing.
- Apply for a validation order so the company can keep operating its bank account while matters are resolved.
- Where there is no future, move to a creditors voluntary liquidation, which puts a practitioner of your choice in control rather than the Official Receiver.
How much time do I have to act?
You typically have only a short window, often a matter of days, between the petition being served and it being advertised in the Gazette, and that window is when the most can be done. After a winding-up order is made it is very difficult to reverse, so early advice is far more valuable than waiting for the hearing.
| Stage | What it means for you |
|---|---|
| Before advertisement | The widest choice: pay, dispute, CVA, administration or a controlled liquidation. |
| After advertisement | The bank account is usually frozen; act urgently to keep trading. |
| After the winding-up order | Compulsory liquidation begins and is very hard to reverse. |
If a petition has been served on your company, call us today. The sooner we speak, the more we can do.
Why speak to NTF about a winding-up petition?
NTF Corporate Solutions is a boutique insolvency practice whose licensed practitioners, James Kaye and Nick Morgan, deal with winding-up petitions and creditor pressure regularly and can act quickly. You speak to a practitioner who can be appointed and act quickly.
The first conversation is free and confidential, and we will tell you honestly whether the company can be saved and what to do next. If you have had a petition, do not wait for the hearing to find out your options.
Frequently asked questions
Can a winding-up petition be stopped?
Yes, a winding-up petition can sometimes be stopped, but only if you act before the hearing and usually before it is advertised. Paying or settling the debt, disputing it on substantial grounds, or proposing a rescue such as a CVA or administration are the main ways to prevent a winding-up order, and each depends on the specific facts.
What happens to the company bank account?
Once a winding-up petition is advertised in the Gazette, banks usually freeze the company account to protect themselves, which can stop the business paying wages and suppliers. This is why acting in the days before advertisement is so important, and a validation order can sometimes allow essential payments to continue.
Who can present a winding-up petition against my company?
Any creditor owed £750 or more can present a winding-up petition once the debt is not disputed and remains unpaid, and HMRC is one of the most common petitioners. A statutory demand often comes first, giving the company 21 days to pay before a petition can follow.
Talk to a licensed insolvency practitioner today
The call is free and confidential, with no obligation. We will explain your options in plain English and tell you where you stand.
the Institute of Chartered Accountants in England and Wales (ICAEW) · Serving the whole of the UK · NTF group since 2009