Winding-up Petition Meaning

If a firm is unable to pay its debts, you may ask the court to “wind up” or close it. This is sometimes referred to as mandatory liquidation. To dissolve a company, you must be owing at least £750 and demonstrate that the business is unable to pay you.

Need a second opinion on your insolvency litigation? Our specialist solicitors & barristers can help by assessing your case prospects and whether a winding-up petition is the right tool. We have highly experienced dual-qualified lawyers, so if our view is your case has limited merit or high risk we can advise you of the best strategy in our first meeting.

Who can issue a Winding up Petition?

Any creditor owing more than £750 may file a petition for winding up. They need to have provided ample opportunity for the company to pay the outstanding debt. An order from the court or a statutory demand will have come before the petition. Before submitting a winding up petition, the creditor must wait 21 days after issuing the Statutory Demand.

How to Apply?

Forms are filled and sent to the relevant court to apply to wind up a company. Your request to the court is referred to as a winding-up petition. If successful:

• The company’s property is sold.
• Legal disagreements are resolved.
• The business recovers money it is owed.
• You and any other creditors are given money.

Instruct our specialist solicitors & barristers now to review your case and issue a winding-up petition against your debtor.

Fees

The charges are:

• $302 in court costs
• Petition deposit of £2,600 (to handle the winding-up)

If the company whom against the winding up petition has been issued has the money to pay back the fees, you might be able to receive your money back.

After someone receives a Winding-up Petition

The courts will convene a hearing once someone receives a winding up petition to determine if the business is actually insolvent and unable to pay its debts. The court will issue a winding up order and appoint an official receiver to liquidate the company if it is found to be insolvent.

Once someone have received the winding-up petition, they have only 7 days to act or they run the danger of having to liquidate their company. A winding up petition initiates the procedure that, if unopposed, leads to the company’s dissolution. A liquidator will realise the company’s assets and distribute the proceeds to the creditors as the first stage in a forced liquidation of the business.

The fact that the company’s creditors drove it into liquidation will be known to the public, in addition to the significant repercussions, from the procedure of compulsory liquidation. Additionally, the banks may freeze the company’s bank accounts after the petition has been posted.

How to Stop a Winding-up Petition?

As a general rule, the quicker you move, the higher chance you’ll have to prevent the petition from being published in The London Gazette and from going to court. As soon as you get a winding up petition, you should consult with a specialist to determine your next course of action.

What Happens if a Winding-up Petition is Approved?

The winding up petition is the formal request for a hearing by the creditors to the courts to determine if the debtor corporation is insolvent. The process of mandatory liquidation might be said to have begun with the winding up petition. As was previously stated, even after a winding up petition has been filed, the compulsory liquidation procedure can still be stopped.

What is a Winding-up Order?

The winding up order is the decision made by the courts following the court hearing. The order announces the company’s entry into liquidation and names an official receiver to serve as liquidator. Once a winding up order has been made, the firm will almost probably be wound up with very little chance of it being undone. Following the winding up order, the compulsory liquidation of the company begins. Initially, the official receiver will be the liquidator by default, though the company can choose its own insolvency practitioner to replace this if it wishes.

How Long Does it Take to Issue a Winding up Petition?

A solicitor’s aid is typically required when submitting a winding up petition. The speed of the actual filing will rely on how well-prepared your legal team is. It will take a bit longer for the hearing.

Contact our specialist winding-up petition solicitors & barristers to help by assessing your case prospects and whether a winding-up petition is the right tool.

Both parties will be informed of the Winding up Petition court hearing date once the proper paperwork has been submitted to the Court. This will take at least two weeks, but most likely longer, as the legislation requires the petition to be publicised in the London Gazette at least seven days after the petition is served on the corporation and at least seven days before the hearing.

The Whole Process Summarised

The petition is filed, served, published for public notice in the London Gazette, and heard in court. In the event that the Judge finds the Petition to be legitimate, a Winding up Order will be issued.

How Can We Help you Oppose a Winding Up Petition?

Our specialist winding-up petition lawyers are experts in defending winding-up petitions. We can advise you as to the specific merits and demerits of your case and can assist you in opposing winding up petitions and negotiating with creditors. If your company has been issued a winding-up petition or statutory demand, you may be able to challenge that petition on the following grounds:

That the debt alleged in the statutory demand or petition to be owing is genuinely disputed on substantial grounds by your company; Your company has a genuine right of set-off against the creditor that exceeds the amount claimed in the statutory demand; or In certain other limited circumstances (for example such as jurisdiction, technical or procedural error or delay).

To oppose a winding-up petition, you will initially need to file a witness statement in opposition with the Court within five business days before the date when the petition will be heard by the Court (rule 7.16 of the Insolvency (England and Wales) Rules 2016). A copy of that witness statement will need to be provided to the petitioning creditor at least five business days before the hearing.

Your company is entitled to appear at the petition hearing so as to oppose the making of a winding-up order. It is a routine matter for companies to instruct solicitors and/or barristers to appear on their behalf at the hearing.