— Winding up petition
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A winding up petition is one of the most serious documents a company director can receive. If the petition is successful and a winding up order is made by the court, your company is placed into compulsory liquidation. You lose control of the business entirely. The Official Receiver is appointed. Staff are dismissed. Creditors are paid in strict legal order — usually recovering very little.
But a petition is not a winding up order. There is a gap between the two — and that gap is where we work. Business Guardian has successfully defended, adjourned, and resolved winding up petitions for directors across the UK. The moment you receive a petition, contact us.
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Understanding
the Winding Up Process.
The Petition
A winding up petition is a formal court application by a creditor seeking an order to wind up your company. Any creditor owed £750 or more can petition, though in practice petitions are most commonly issued by HMRC (for unpaid VAT, PAYE, or Corporation Tax), trade creditors, and finance companies. The petition is filed at the Business and Insolvency Court and served on the company at its registered address.
Advertisement in the London Gazette
If the petition is not dealt with, the petitioner will advertise it in the London Gazette — typically seven to fourteen days before the hearing. Once the petition is advertised, the company's bank accounts are almost certain to be frozen. This is often the moment a director discovers the petition — but at this stage, time has already been lost. Acting before advertisement is significantly more effective.
The Court Hearing
The petition hearing is typically listed at the court within twenty-eight days of the petition being filed. At the hearing, a judge considers the petition and any response from the company. If no credible challenge is made, a winding up order will be made. If the company can demonstrate that the debt is disputed, or that a credible resolution is in place, the petition may be adjourned, dismissed, or stayed.
The Winding Up Order
If a winding up order is made, the company enters compulsory liquidation. The Official Receiver is appointed as liquidator. The directors' powers cease immediately. All company assets are frozen. Staff are dismissed. The Official Receiver investigates the company's affairs and the conduct of its directors — including whether any transactions before the petition should be set aside, and whether any director conduct warrants disqualification.
— the actionable steps
What Can Be Done
After Receiving a Petition.
01
Paying the Debt in Full
If the petition debt is undisputed and affordable, paying the creditor in full before the hearing will result in the petition being withdrawn. We can advise on the fastest route to settlement and manage the negotiation with the petitioning creditor.
02
Disputing the Debt
If the petition debt is genuinely disputed — if the money is not owed, the amount is incorrect, or there is a legitimate cross-claim — the petition can be challenged in court. A company cannot be wound up on a disputed debt. We work with insolvency solicitors to prepare the challenge and attend the hearing.
03
Proposing a CVA
Where the company is viable but cannot pay the petition debt immediately, proposing a Company Voluntary Arrangement can result in the petition being adjourned or stayed while the CVA is voted on by creditors. A successful CVA vote will cause the petition to be dismissed. Business Guardian has assisted numerous directors in using a CVA to resolve a winding up petition.
04
Entering Administration
Appointing an administrator before the winding up hearing results in an automatic stay of the petition. The moratorium provided by administration prevents the hearing from proceeding. This is a powerful tool where the company has a viable future but the petition debt cannot be satisfied quickly.
05
Negotiating with the Petitioner
In many cases, the petitioning creditor does not want to wind the company up — they simply want to be paid. We negotiate directly with petitioning creditors on behalf of directors, seeking a negotiated settlement, a time to pay arrangement, or a consent order that adjourns the petition while an agreement is reached.
HMRC Winding Up Petitions — A Note
HMRC is the most common petitioner in UK business insolvency. HMRC winding up petitions arise from unpaid VAT, PAYE, or Corporation Tax debts where previous HMRC correspondence has been ignored. HMRC petitions are pursued more quickly and with less flexibility than commercial creditor petitions — but they can still be challenged, adjourned, or resolved through a Time to Pay arrangement presented with professional support. We have extensive experience of engaging with HMRC on behalf of companies facing petition.
— Common Question
Frequently Asked
Questions
How long do I have after receiving a petition?
The window between receiving a petition and the court hearing is typically twenty-one to twenty-eight days. However, if the petition has already been advertised in the London Gazette, bank accounts may already be frozen and the hearing may be imminent. There is no safe amount of time to wait. The moment you receive a petition — or learn that one has been filed — contact Business Guardian immediately.
Can I stop a winding up petition if my accounts are already frozen?
Yes, but the options narrow significantly once the petition is advertised. Bank accounts are frozen by the banks once they become aware of the petition from the Gazette advertisement. Getting accounts unfrozen requires either satisfying the debt, obtaining a court order, or appointing an administrator. We advise on the fastest available route based on your specific position.
Will my customers find out about the petition?
Once a petition is advertised in the London Gazette, it is publicly visible. Suppliers, customers, and credit agencies can and do check the Gazette. This is one of the most compelling reasons to act before advertisement — a petition dealt with before the seven-day advertising window causes far less commercial damage than one that becomes public.
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