reviewed-by
Reviewed by
Christopher Andersen
Avatar Image
Reviewed by Christopher Andersen
Chris is an Insolvency Practitioner regulated by the ICAEW since 2014,. He is experienced in contentious insolvency with excellent analytical skills and strong knowledge of both general and technical insolvency matters.
Meet Our Experts
16th April 2024

A winding up petition is a formal legal action taken by creditors to shut down a company that cannot pay its debts. This guide outlines the essential steps involved, from filing to court hearing.

Contents
  1. Winding up Petition Process
  2. Winding up Petition Advice for Directors
  3. FAQs on the Winding up Petition Process

Winding up Petition Process

The process of winding up a company through a winding up petition starts with the creditor’s decision to pursue this course of action, all the way to the distribution of the company’s assets to its creditors. Understanding each step is essential for any creditor considering this option.

Decision to File a Winding Up Petition

This step is initiated after all other debt recovery methods have failed. Creditors must confirm that the outstanding debt exceeds £750 and weigh the nearly £2,000 cost associated with filing the petition.

Preparing and Filing the Petition

Creditors need to prepare a winding up petition using Form 4.2 and an affidavit to verify the debt. These documents are then submitted to the appropriate court based on the company’s share capital.

Court Fees and Deposit

Filing the petition requires a court fee and a deposit to cover the winding up process costs, which may be recuperated if the company can settle its debts.

Serving the Petition

The sealed petition must be officially served to the company at its registered office, main place of business, or directly to a company director.

Advertisement in the London Gazette

For transparency and to allow other creditors to come forward, the petition must be advertised in the London Gazette at least seven days after serving and seven days before the hearing.

Court Hearing and Outcome

The court sets a hearing date to consider the petition, where all interested parties can present their cases. The court may then issue a winding up order, adjourn, or dismiss the petition.

Liquidation and Distribution of Assets

If a winding up order is granted, an Official Receiver or insolvency practitioner liquidates the company’s assets. The proceeds are used to repay creditors according to priority, and the company is eventually dissolved.

This process is complex and requires careful consideration of legal requirements and potential consequences. Creditors are advised to seek professional advice to navigate this process effectively and ensure compliance with all legal obligations.

Winding up Petition Advice for Directors

If you’re a director dealing with the pressure of a winding up petition, remember you’re not alone. At Company Debt, our specialist team of insolvency practitioners is ready to provide you with the guidance and support you need during this challenging time. Whether you’re looking for ways to address the petition, explore alternative solutions, or understand the implications for your business, we’re here to help.

Don’t wait until it’s too late. Reach out to our experts today by phoning 0800 074 6757, using our live chat feature, or emailing us at info@companydebt.com. Let’s work together to find the best path forward for you and your company.

FAQs on the Winding up Petition Process

To initiate a winding up petition, a creditor must first ensure that the debtor company owes at least £750. The creditor then prepares and files Form 4.2, the winding up petition, accompanied by an affidavit that verifies the debt, at the appropriate court based on the company’s share capital.

Once the winding up petition is filed and approved by the court, it must be served on the debtor company. This involves delivering a sealed copy of the petition to the company’s registered office, or if necessary, to its main place of business or to a director personally.

After the petition is served, it must be advertised in the London Gazette at least 7 days before the court hearing and no earlier than 7 days after it has been served. This advertisement is to inform other potential creditors of the petition and the scheduled court hearing.

At the hearing, the court reviews the petition and the evidence presented by the creditor. The debtor company can also present its defense. The court then decides whether to issue a winding up order, dismiss the petition, or adjourn the hearing for further consideration.