Winding-Up Petition

A winding-up petition is the formal application made to the court asking for a company to be closed down because it cannot pay its debts, a process gov.uk describes as compulsory liquidation. Gov.uk guidance for creditors confirms that to wind up a company the creditor must be owed £750 or more and be able to prove that the company cannot pay, mirroring the statutory threshold in section 123 of the Insolvency Act 1986. Gov.uk guidance is explicit that the application to the court is known as a 'winding-up petition'.

Presenting a petition is not free: gov.uk sets out fees of £352 in court fees and £2,600 as a petition deposit to manage the winding-up, which the creditor may recover if the company's assets are sufficient. If the court accepts the petition it lists it for a hearing, and the petitioner must publicly advertise the hearing in The Gazette in advance so that other interested parties, including other creditors, are aware of it.

If the petition succeeds, gov.uk explains that the court will issue a winding-up order, and the court will put an official receiver in charge of the liquidation, who then begins turning the company's assets into money to pay its debts. Success is not guaranteed to produce a full recovery for the petitioning creditor: gov.uk warns that a creditor might not get all or any of the money they are owed, since realisable assets may be limited and other creditors can also register claims against the same pool of funds.