Understanding your options when faced with a winding-up petition
A winding-up petition represents one of the most serious actions a creditor can take against a business. It results in court-ordered compulsory liquidation unless you take swift action to save your company. So what does it mean when a creditor serves a winding-up petition, and can you adjourn or stop it?
What is a winding-up petition?
When a creditor has unsuccessfully attempted to recover a debt of £750 or more over a period of time, they can petition to wind-up their debtor under the belief that your company is insolvent. Once a winding-up petition is presented you need to act very quickly, as you only have seven days in which to stop the petition or have it adjourned.
A crucial point in the timeline for stopping or adjourning a winding-up petition is when it’s publicly advertised in the Gazette. If it reaches this stage, it means your business accounts will be frozen by your bank to minimise their risk of loss.
If you have good reason, you can apply to the court for an adjournment. You may need more time to gather evidence for disputing the debt before the court hearing date, for example.
Seeking licensed insolvency help is crucial when trying to adjourn or stop a winding-up petition, however, and can lead to the company entering a formal insolvency procedure that protects it from liquidation. If it’s put to the court that a licensed insolvency practitioner is helping your business deal with the situation, you may be granted an adjournment whilst arrangements are put in place.
If you have tax arrears, a licensed IP could help you apply to HMRC for a Time to Pay arrangement (TTP). This allows arrears to be repaid in instalments, and could free up cash to pay the creditor who has instigated the winding-up petition.
Concerned about National Living Wage and NI increases?
With the rates of both National Living Wage and employer National Insurance Contributions increasing in recent years, this additional cost of employing staff has added more pressure onto already squeezed cash flows. If you are worried about the impact this is having on your company's finances, talk to the experts at UK Liquidators. As licensed insolvency practitioners we can explain your options and help you plot a way forward. Call today on 0808 253 9878.
Stopping a winding-up petition before it’s advertised in the Gazette
There are several courses of action you can take before the petition is advertised in the Gazette, including:
Pay your creditor in full
Repaying the debt in full, including the creditors’ costs for the petition, should stop it becoming public knowledge, but you need to act very quickly.
Enter company administration
When your company enters administration, any ongoing legal action must cease – this moratorium remains in place for eight weeks, and allows a licensed insolvency practitioner to plan for the future of the business.
Enter into a Company Voluntary Arrangement (CVA)
A CVA restructures your debts and allows for a single, affordable monthly repayment to be made. If your business is deemed viable for the future by a licensed IP, you remain in control of the company with a view to trading your way out of financial difficulty.
Dispute the debt
If you have a legitimate dispute about the amount of the debt, or whether the debt even exists, you can dispute the debt at court. This is only advisable with clear evidence supporting your standpoint, as you could be accused of misleading the court.
Start your online liquidation today
If you have decided liquidation is the right option for your limited company, you can take the first step and begin the process online using our online portal. Starting the process is quick, simple, and can be done at a time that suits you. Your information will be submitted to your local UK Liquidators insolvency practitioner who will be with you every step of the way. Click here to start your company’s liquidation online.
Stopping a winding-up petition after it’s been advertised
If the winding-up petition has already been advertised in the Gazette, your options for stopping or adjourning the petition are reduced. If action is not taken, a winding-up order will be made against your company and compulsory liquidation will quickly follow.
You can still dispute the debt if you have strong evidence the amount is incorrect or that you’ve already paid it.
You can enter company administration, and may also be able to negotiate a Company Voluntary Arrangement if you’re eligible, but 75% of creditors (by debt value) need to vote in favour of this.
Obtaining professional assistance quickly is the key to adjourning or stopping a winding-up petition, and UK Liquidators can provide the professional guidance you need. Please contact one of the team to arrange a free, same-day consultation to quickly assess your best options – we operate from an extensive network of offices around the UK.
Jonathan Munnery
Insolvency & Restructuring Expert | 20+ Years Insolvency Experience
Jonathan is a Partner at Real Business Rescue and member of both the Insolvency Practitioners Association (MIPA) and The Association of Business Recovery Professionals (MABRP). Jonathan has over 20 years’ experience guiding directors through CVL and MVL processes, helping them understand their options and navigate financial distress with clarity and compassion.
IPA Member MABRP Member IPA Regulated
“ Directors often wait too long before seeking advice. The earlier you call, the more options remain available to you — and the better the outcome for everyone involved. ”
Jonathan is a Partner at Real Business Rescue and member of both the Insolvency Practitioners Association (MIPA) and The Association of Business Recovery Professionals (MABRP). Jonathan has over 20 years’ experience guiding directors through CVL and MVL processes, helping them understand their options and navigate financial distress with clarity and compassion.
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