Issuing a Winding Up Petition

A winding up order, also referred to as compulsory liquidation, is a formal legal measure initiated by the court that mandates a company to liquidate its assets and cease operations.

Such orders typically result from a creditor presenting a winding up petition. A creditor will usually seek court intervention to issue a winding up order following multiple unsuccessful attempts to recover outstanding debts from a company.

When the court grants a winding up order, the company is declared insolvent due to its failure to meet financial obligations to creditors when they fall due.

Expert Commercial Law has access to a specialised panel of experienced solicitors who can assist your business in issuing a winding up petition. For more information on this matter and to consult with our legal professionals, please reach out to us today.

Our solicitors may also be able to assist in stopping a winding up petition if the same has been made against your company.

Issuing a winding up petition against a company

Issuing a winding up petition is a legal process that involves several steps. Here is a general overview of the winding up process:

Assessment of Debt:

Before filing a winding up petition, creditors should assess the debt owed by the company. This involves confirming the amount owed and ensuring that all legal requirements are met. A Company Voluntary Arrangement (CVA) can be proposed at any time, although the company must act quickly before proceedings begin.

Statutory Demand:

Creditors often start the process by serving a statutory demand on the debtor company. This is a formal written demand for payment of the debt within a specific timeframe, usually a 21-day statutory demand. The debtor must either pay the debt or reach an agreement to settle it during this period.

It is important to note that it is not compulsory for a statutory demand to be issued before proceeding to wind up a company.

Non-compliance with Statutory Demand:

If the debtor company fails to comply with the statutory demand, the creditor can proceed to apply to the court to file a winding up petition.

Petition Preparation:

The winding up petition is a legal document that outlines the details of the debt, the creditor’s claim, and the grounds for seeking the winding up of the company. It must comply with the rules set out in the Insolvency Rules 2016.

Issuing a winding up petition:

The winding up petition is then issued at the relevant court. Winding up petitions are usually filed in the High Court, although certain cases may be filed in the county court. The petitioner must pay the appropriate court fees.

Serve the Petition:

Once issued, the winding up petition must be served on the debtor company. This involves delivering a copy of the petition to the registered office of the company.

Advertisement of the Petition in the London Gazette:

Details of the winding up petition will be advertised in the Gazette. This public notice informs interested parties, including other creditors and shareholders, about the petition.

Court Hearing:

When the petitioner has issued the petition, the court will set a hearing date. During the hearing, they will investigate the conduct and consider the winding up petition. The debtor company has the opportunity to respond to the petition and present its case when disputing the debt.

Winding Up Order:

If the court is satisfied that the debt is due and owing, and the company is unable to pay its debts, it may grant a winding up order. This order initiates compulsory liquidation process. A Licensed insolvency practitioner will be appointed to realise the compulsory liquidation of the company. The company’s assets and the company’s bank account will be frozen and liquidated to pay off unpaid debts.

Why choose Expert Commercial Law?

If you have any queries on the process of issuing a winding up petition, then our panel of solicitors can assist you.

All of the commercial dispute solicitors on our panel have the experience and expertise required to take on your case. Each solicitor is vetted before being allowed onto our panel, and we only select the best in the business. All of our solicitor firms are authorised and regulated by the Solicitors Regulation Authority (SRA).

Our solicitors also help with other commercial claims, such as breach of contract and CCJ removal.

Please note we are not a firm of solicitors; however, we maintain a panel of trusted and regulated legal experts. If you contact us in relation to a commercial law case, we will pass your case on to a panel firm in return for a fee from our panel firms. We will never charge you for passing on your case to a panel firm.