In this article we explain the meaning of ‘winding up’ as it pertains to businesses.

We’ll cover the process and procedure by which a winding up petition unfolds, and what the options are for company directors.

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Our specialist advice team offers a free consultation via live chat, on 08000 746 757 or in person. We can offer advice about winding up either solvent or insolvent companies, both of which require a licensed insolvency practitioner.

WUP Process

What Does ‘Winding Up’ Mean?

Winding up a company means to close a business via legal due process, resulting in its dissolution. This means it will be struck of the official register at companies house and cease to exist.

As part of this process all creditors will need to be paid, stock sold off, and liquidated assets distributed to company shareholders.

In the UK the term is often synonymous with liquidation.

Choosing the correct winding up process will depend upon whether your company is solvent or insolvent.

3 Way to Wind Up a Limited Company

(1) Striking Off

When a company has no debt and no assets it can simply be removed or ‘struck off’ the Companies House register. This method is known as striking off, dissolving a company or simply dissolution. It comes with a simple £10 fee for submitting Form DS01.

NB, this method cannot be used for a company with either assets ot debts.

(2) Liquidation

Voluntarily winding up an insolvent company is known as creditors voluntary liquidation. Or where it’s instigated by a creditor for non payment of debts it’s known as compulsory liquidation.

In both cases, a licensed insolvency pracitioner sells assets, and uses realised cash to pay creditors in order of priority.

(3) Members Voluntary Liquidation

Solvent liquidation, known as a members voluntary liquidation must again be carried out by an insolvency practitioner (IP) The IP sells assets then realises them for the shareholders. There tax benefits to this method know as Entrepreneurs Relief.

How Much Does it Cost to Wind up a Company?

  • Court fee for a winding up petition = £1,880
  • Process server fee = £100 approx
  • Advertising a petition in the Gazette £74.50
  • Solicitors fee £500-800 to lodge the petition approx

Can I Wind up a Company Which Owes me Money?

If you a creditor, owed a debt of at least £750 (which you can prove), it is your right to petition the court via a mechanism known as a ‘Winding up Petition.’

This final stage threat gives the company just 7 days to make good on its debt. If it doesn’t the case comes before a High Court Judge who rules upon the validity of the claim and, where upheld, issues a Winding up Order which puts the company into immediate compulsory liquidation.

Need Help or Advice?

If your company is being petitioned, you will need to speak to us with the swiftest urgency, as the closer it comes to the 7 day time limit, the less chance there is to find an alternative to compulsory liquidation. If you want free, confidential advice contact us via the live chat, phone or emai