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Company insolvency • winding-up petitions • unpaid business debts

Winding-Up Petitions for Company Debts

A winding-up petition is a company-insolvency procedure with serious consequences. It can be available where a company owes at least £750 and cannot pay, but it should not be used as a substitute for determining a genuinely disputed debt.

KEY ANSWER

The position in brief

A creditor can apply to wind up a company where it is owed at least £750 and can prove the company cannot pay its debts. The current GOV.UK fees are £352 for the petition plus a £2,600 petition deposit.

If a petition succeeds, the court makes a winding-up order and an official receiver takes control of the liquidation process. The creditor is not guaranteed full payment and may recover only a dividend, or nothing, depending on available assets and competing creditors.

Legal issues

The creditor must establish an undisputed debt and a proper insolvency basis. A statutory demand or unsatisfied judgment can be evidence, but the route chosen must fit the facts. Insolvency proceedings are not designed to adjudicate a substantial contractual dispute.

Service, advertisement and hearing requirements are critical. GOV.UK guidance requires the petition to be served and the hearing to be advertised in The Gazette at least 7 working days before the hearing, with the required court filings.

Evidence that matters

Keep the contract or judgment, debt calculation, statutory demand, certificate or other proof of service, company search, correspondence, payment history and any evidence of insolvency or failed enforcement.

Reasonable lines of enquiry

Before petitioning, check whether the debt is genuinely disputed, whether another creditor has already petitioned, whether the company is in administration, liquidation or a restructuring process, and whether ordinary enforcement has a better prospect of direct recovery.

What happens next

The creditor prepares and presents the petition, pays the court fee and deposit, serves the company and completes the required evidence of service. If accepted, the court fixes a hearing. The hearing must then be advertised in accordance with the rules. At the hearing the court can make a winding-up order, dismiss or adjourn the petition, or make another appropriate order.

Immediate steps

Do not present a winding-up petition simply to increase pressure where liability is substantially disputed. Verify the debt, company status, insolvency evidence, service history and likely recovery before incurring the petition deposit.

What should you send us?

Send the debt documents or judgment, statutory demand and service evidence, company details, all dispute correspondence, payment history and any Companies House or insolvency information.

Legal information from Theodorous. The law and procedure can change and the application of the law depends on the facts. This guide is general information, not advice on your individual case.

HOW WE CAN HELP

What Theodorous can do

We can assess whether a winding-up petition is available and proportionate, prepare the petition and evidence, arrange service and advertisement, deal with opposition and represent the creditor through the hearing.

NEXT STEP

Assess whether winding-up is the right recovery route

Send the debt and insolvency evidence. We can assess whether a petition is available, proportionate and commercially sensible.

Assess whether winding-up is the right recovery route

FREQUENTLY ASKED QUESTIONS

Questions about this issue

How much must a company owe before I can petition to wind it up?

Current GOV.UK guidance states that a creditor must be owed at least £750 and be able to prove the company cannot pay.

How much does a winding-up petition cost?

The current court fee is £352 and the petition deposit is £2,600, before legal, service and Gazette costs.

Will a winding-up petition guarantee I get paid?

No. If the company is wound up, assets are dealt with through the insolvency process and other creditors may also claim. Full recovery is not guaranteed.