I’ve received a winding-up petition. What should I do?
Please note: this page is a brief, general overview to help you understand your options. It doesn’t cover every detail or every possible route, and it isn’t legal or financial advice. Every situation is different, so please talk to us before making any decisions.
In short: act straight away. A winding-up petition is a creditor asking the court to close your company, and time is short.
What a winding-up petition is
A creditor who is owed at least £750 and hasn’t been paid can ask the court to close your company. This is called a winding-up petition. HMRC is one of the most common petitioners. If the court agrees, it makes a winding-up order and the company goes into compulsory liquidation.
What happens next
- The petition is delivered to the company.
- About a week later, it is usually advertised publicly in The Gazette.
- Once it’s advertised, the company’s bank will usually freeze its accounts, which can stop the business trading.
- At the hearing, the court decides whether to make a winding-up order.
Your options
- If the company can pay what it owes, paying the debt may lead the creditor to agree to the petition being dismissed. Ideally, do this before the petition is advertised.
- The creditor may accept a payment plan, and the hearing may be put back to give you time.
- If the debt is genuinely disputed, the petition can be challenged in court. You’ll need a solicitor for this.
- In some cases a rescue procedure, such as administration, can still be used. The rules are strict once a petition has been issued, so you’ll need advice quickly.
What not to do
- Don’t ignore it. The hearing will go ahead without you.
- Don’t move money out of the company or pay other creditors or yourself. Once a petition has been issued, payments from the company’s account can later be reversed, so take advice before making any.
Talk to us in confidence
Call us or send a message. The first conversation is free and there’s no obligation to go further.