A winding up order is the final court order made after a creditor issues a winding up petition to compulsorily wind up a company. If you reach the stage where a winding up order is made against your company it will then be liquidated and cease to exist.

There are several stages before a winding up order is made which offer opportunities to contest the process and/or negotiate with the creditor. These stages are the creditor obtaining a court judgment for a debt and/or a creditors serving your company with a statutory demand and then the creditor must issue a winding up petition which you may seek to contest, followed by a delay before there is hearing of the petition at court.

Winding Up Order Guide

What happens after a Winding up Order is Made Against Your Business?

Once the court has made a winding up order, there’s very little you can do to prevent the liquidation of your business. In this situation, your options have run out, and the court will appoint an Official Receiver (OR) to liquidate all of your company’s assets, and its eventual dissolution at Companies House.

Taking action between the petition being issued and the Order made

If you want to save your business then you have to act quickly.

The court must review and approve the petition before it is issued to the insolvent company. After receiving the winding up petition, you then have seven days before the petition is advertised in The Gazette, which will mean other creditors, customers and suppliers may well become aware of it, making any chance of business recovery even harder. There will also be a period of time between issue of the petition and hearing which can be 6-8 weeks. These time periods may give you a window of opportunity to take one of the follow actions:

  1. Pay all the debts owed to the creditor who has issued the winding up petition against your business.
  2. Dispute the debt if you have substantial proof that the debt claim is inaccurate or unfair. You must have strong grounds to do so as this is a serious allegation against the creditor called ‘abuse of court process’.
  3. Propose a company voluntary arrangement (CVA) for the repayment of the debt over a longer period of time. If accepted by your creditors, that will allow you to avoid the liquidation process and continue trading.
  4. Get an administration order to put the company into administration. That would stay all ongoing legal action against the business, including the winding up petition. An administrator would then be appointed to evaluate some of the company’s assets and repay its debts.       

Can You Stop or Appeal a Winding up Order?

Your options are very limited. However, there are still a few avenues you could explore:

(a) Have the winding up order rescinded or dismissed

You can apply to the court to have the winding up order rescinded within seven days of the order being made. To be successful, you will have to show that the court did not have all the facts or the circumstances of the company are now materially different than when the order was made.

(b) Apply to have the proceedings stayed

An application to temporarily or permanently ‘stay’ the liquidation proceedings can be made by a creditor, a shareholder of the company, an appointed liquidator or the official receiver.

(c) Appeal the winding up order

It is possible to appeal the winding up order. However, this remedy is limited and can only take place on the basis that the decision was wrong or unjust due to serious procedural or other irregularities.  

What Happens to Directors After a Winding Up Order?

Once the judge has granted the winding up order, the director’s powers cease. The court will appoint an Official Receiver to take over. Their role will be to communicate with the directors, secure any company assets, make staff redundant and deal with creditors.

In time, a licensed insolvency practitioner may be appointed to take over from the Official Receiver to complete the corporate liquidation.

Directors conduct will be considered as part of the liquidation process.

Need Professional Winding up Order Advice?

If you’ve received a statutory demand you cannot pay, have been issued with a winding up petition or a winding up order has been made against your company, you need to act fast.

We can discuss your options with you and help you carefully consider the implications of each. For a free, no-obligation consultation, please get in touch with our team.