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Business & Company

Received a Winding Up Petition?

A winding up petition is one of the most serious documents a company can receive. A creditor is asking the court to force your company into liquidation. You have approximately 7 days from when the petition is advertised to act before your bank accounts are frozen.

Act within 7 days
What This Means

In plain English

A winding up petition is filed by a creditor owed £750 or more who believes your company cannot pay its debts. Once filed, it is 'advertised' in the London Gazette — and this is when your bank may freeze your accounts. The hearing date is typically around 7-8 weeks after filing, but the advertising of the petition can trigger immediate and catastrophic consequences. You can apply to court to 'restrain' (delay) the advertising of the petition if you act before publication. Grounds to oppose include: the debt is disputed, you have a counterclaim, or you've reached an agreement to pay.

Action Plan

What to do right now

1

Act before the petition is advertised in the Gazette

This is the critical window. Once advertised, your bank will likely freeze your accounts. If you've received the petition but it hasn't been advertised yet, you have time to apply to restrain it.

2

Check if the debt is disputed

If you genuinely dispute the debt (the amount is wrong, the goods were defective, there's a counterclaim), you can apply to court to have the petition dismissed on this basis.

3

Pay the debt if you can

If the debt is undisputed and you can pay it, do so immediately. Ask the petitioner to confirm in writing they'll withdraw the petition on payment. Get this in writing before paying.

4

Apply for a validation order if needed

If your accounts have been frozen, a validation order from the court allows your bank to unfreeze them so you can continue trading while the petition is resolved.

5

Get specialist insolvency advice immediately

This is not a situation for general legal advice. An insolvency solicitor or licensed insolvency practitioner can assess your options within hours. Time is the critical factor.

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Common Questions

Frequently asked questions

What happens if the winding up petition is granted?

An Official Receiver is appointed to take control of the company. All assets are realised (sold) and distributed to creditors in order of priority. Directors lose control of the company immediately.

Can I continue trading after receiving a winding up petition?

Technically yes, until the order is made — but once advertised, your bank accounts will likely be frozen, making trading impossible. You also risk personal liability if you continue trading and can't pay debts.

Can directors be held personally liable?

Yes, in some circumstances. Directors who allow a company to trade while knowingly insolvent can face personal liability for company debts and disqualification from acting as a director.

What's the difference between a winding up petition and administration?

Administration is a rescue procedure where a company can continue trading under court protection while a rescue plan is put in place. Winding up leads to liquidation. Administration can sometimes be used to defeat a winding up petition.

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