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Winding up petition

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The winding up of a company is a complex minefield. Many companies are uncertain as to what course of action to take when faced with the undesirable prospect of being served with a winding up petition. Here we briefly explain the process and explore some options on opposing a winding up petition.

PLEASE NOTE the following is subject to amendments brought in by the Corporate Insolvency and Governance Act 2020. Please refer to the latest guidance or contact us for more information.

When would a company need this service?

The winding up of a company is a complex minefield.  Many companies are uncertain as to what course of action to take when faced with the undesirable prospect of being served with a winding up petition. Service of a winding up petition is the start of a process whereby the petitioner is attempting to have the company put into compulsory liquidation by the court. There are many reasons why a petitioner may seek to have a company wound up, however the most common reason is that the company has become unable to pay debts owing to its creditors, i.e. the petitioner is claiming that the company is insolvent. The most common petitioner is HMRC, in instances where the company has not paid its taxes. However, alongside HMRC there are other individuals/organisations that can bring winding up proceedings against a Company which include:

  • Suppliers of a company who are owed more than £750.00;
  • Employees in exceptional circumstances;
  • Shareholders where it is “just and equitable” to do so;
  • Any creditors of the company;
  • Any person/organisation who holds a judgement debt against the company; and
  • The Secretary of State where it is in the public interest to do so.

Severity of a winding up petition

Many companies don’t always realise the severity of a winding up petition being presented against them. Once a winding up petition has been presented and advertised in the London Gazette it is likely to have dire consequences for a company which include:

  • Difficulty in the company obtaining credit;
  • The company’s bank accounts being frozen, which is likely to impact on day to day trading (see below);
  • Any dispositions that the company has made could potentially be void (see below);
  • Damage to the company’s reputation; and
  • Legal costs in defending and/or responding to the winding up petition;

In order to deal with the difficulties of the company’s bank accounts being frozen, or the risk of a disposition becoming void, there is the possibility of the company applying for a validation order. Our lawyers will be able to assist you with this process.

How to oppose a winding up petition

There are a number of ways in which a winding up petition can be opposed. Some examples of ways to defend a winding up petition include:

  • The alleged debt owed is genuinely disputed on substantial grounds by the company;
  • The company has a right to set-off against the creditor which exceeds the amount claimed;
  • The petitioner has failed to comply with the relevant procedure, or there is a technical error which should lead to the winding up petition being dismissed.

How long does it take?

Normally the court will list a hearing for the petition to be heard between 2-3 months after it has been presented. 

If the matter is adjourned, the court will not usually grant an adjournment for more than 18 weeks, unless there are exceptional circumstances. However, it is possible for a company to request more than one adjournment. Depending on how many adjournments a company is permitted  and the period of time between each of those adjournments, it could take up to 18 months before a winding up petition is either dismissed or results in the company being wound up by the court.

What should companies do before calling

It would be helpful if as much relevant documentation as possible could be to hand prior to contacting us. Such documentation may typically include the winding up petition and any other documents relating to the debt sought.

Is it expensive? What are the likely costs?

In most cases we are able to agree a fixed fee to represent a company at the Companies Court. If you wish to present a winding up petition against a company, please see our detailed guide here which sets out the procedure, the costs and likely disbursements that will be incurred. 

Meet the Winding up petition team
Ray Crudgington
Managing Partner
greenwich
02083054224
ray.crudgington@grantsaw.co.uk
Maria Lati
Partner
Head of Residential Property
blackheath
02083054229
maria.lati@grantsaw.co.uk
Mike Clary
Partner
Head of Family
greenwich
02083054237
mike.clary@grantsaw.co.uk
Kalpa Prajapati
Partner
Head of Private Client
blackheath
02083053536
kalpa.prajapati@grantsaw.co.uk
Mario Savvides
Partner
Head of Commercial Property
greenwich
02083053531
mario.savvides@grantsaw.co.uk
Sarah-Kate Jackson
Partner
Head of Litigation
greenwich
02083054236
sarah-kate.jackson@grantsaw.co.uk
Adina-Leigh Collins
Litigation
Solicitor
greenwich
02083053556
adina-leigh.collins@grantsaw.co.uk
Aimal Gram
Commercial Property
Solicitor
greenwich
02083053524
aimal.gram@grantsaw.co.uk
Aisha Mohammed
Residential Property
Solicitor
greenwich
02083054228
aisha.mohammed@grantsaw.co.uk
Aishat Balogun
Aishat Balogun
Family
Solicitor
greenwich
02083054214
aishat.balogun@grantsaw.co.uk
An Le Tran
Commercial Property
Professional Support Solicitor
greenwich
02083054226
anle.tran@grantsaw.co.uk
Angus Young
Litigation
Solicitor
greenwich
02083054225
angus.young@grantsaw.co.uk
Atifha Aftab
Atifha Aftab
Family
Solicitor
greenwich
02083054238
atifha.aftab@grantsaw.co.uk
Bimal Kotecha
Litigation
Solicitor
greenwich
02083053523
bimal.kotecha@grantsaw.co.uk
Charlotte Mandy
Charlotte Warren
Private Client
Solicitor
blackheath
02083054231
charlotte.warren@grantsaw.co.uk
Claire Mac Mahon
Litigation
Solicitor
greenwich
02083053537
claire.macmahon@grantsaw.co.uk
Deborah Taite
Residential Property
Solicitor
blackheath
02083053542
deborah.taite@grantsaw.co.uk
Emily Pearce
Residential Property
Solicitor
greenwich
02083053526
emily.pearce@grantsaw.co.uk
Georgia Beales
Litigation
Paralegal
greenwich
02083054206
georgia.beales@grantsaw.co.uk
James McKimm
James McKimm
Corporate and Commercial
Solicitor
greenwich
02083054217
james.mckimm@grantsaw.co.uk
Jeremy Brooks
Jeremy Brooks
Private Client
Solicitor
blackheath
02083053534
jeremy.brooks@grantsaw.co.uk
Joanna Godden
Notary Public
Notary
greenwich
02083083535
joanna.godden@grantsaw.co.uk
Kim Whitaker
Kim Whitaker
Corporate and Commercial
Head of Corporate and Commercial
greenwich
02083053539
kim.whitaker@grantsaw.co.uk
Laura Danquah
Compliance Manager
greenwich
02083054222
laura.danquah@grantsaw.co.uk
Lauren Smith
Employment and Family
Paralegal
greenwich
02083053543
lauren.smith@grantsaw.co.uk
Mandeep Clair
Family
Solicitor
greenwich
02083054235
mandeep.clair@grantsaw.co.uk
Michael Pope
Employment
Consultant Solicitor
greenwich
02083053540
michael.pope@grantsaw.co.uk
Michelle Pinnington
Michelle Pinnington
Residential Property
Solicitor
greenwich
02083054216
michelle.pinnington@grantsaw.co.uk
Noella Gooden
Employment
Solicitor (Australian qualified)
greenwich
02083053543
noella.gooden@grantsaw.co.uk
Raj Waghela
Raj Waghela
Residential Property
Solicitor
greenwich
02083053529
raj.waghela@grantsaw.co.uk
Randeep Thethy
Randeep Thethy
Residential Property
Solicitor
greenwich
02083054209
randeep.thethy@grantsaw.co.uk
Ruggero Pesciatini
Ruggero Pesciatini
Corporate and Commercial
Paralegal
greenwich
02083054220
ruggero.pesciatini@grantsaw.co.uk
Sarah Conner
Sarah Conner
Private Client
Solicitor
blackheath
02083054234
sarah.conner@grantsaw.co.uk
Simran Lalli
Simran Lalli
Employment
Solicitor
greenwich
02083054208
simran.lalli@grantsaw.co.uk
Susan Collins
Commercial Property
Solicitor
greenwich
02083054200
susan.collins@grantsaw.co.uk
Tatiana Zenina
Tatiana Zenina
Private Client
Solicitor
blackheath
02083054239
tatiana.zenina@grantsaw.co.uk
Trisha Djemal
Trisha Djemal
Residential Property
Consultant Solicitor
blackheath
02083053546
trisha.djemal@grantsaw.co.uk
Tyrone Grant
Residential Property
Head of Leasehold Enfranchisement
blackheath
02083053522
tyrone.grant@grantsaw.co.uk
Denise
Accounts Staff
greenwich
02088586971
enquiries@grantsaw.co.uk
Jayne Lye
Support Staff
Office Manager
greenwich
02083054204
jayne.lye@grantsaw.co.uk
Jamie
Support Staff
Head of IT
greenwich
02088586971
enquiries@grantsaw.co.uk
Kasia
Accounts Staff
greenwich
02088586971
enquiries@grantsaw.co.uk
Michael Tobin
Michael Tobin
Support Staff
Marketing and Business Development Manager
greenwich
02083053550
michael.tobin@grantsaw.co.uk
Sue Holness
Support Staff
Customer Services
greenwich
02083054221
sue.holness@grantsaw.co.uk