What is a Winding Up Petition?
A winding up petition is a petition from an unpaid creditor of a company that seeks to force the debtor company into liquidation through the compulsory liquidation process.
A creditor owed an undisputed debt can present a winding up petition if it can show that the company is unable to pay its debts. The usual evidence is a statutory demand for more than £750 left unpaid for three weeks, or a court judgment that the creditor has tried to enforce without success, but a statutory demand is not always required. A genuinely disputed debt is not a proper basis for a petition.
How Can You Stop a Winding Up Petition?
If you act quickly, there are a few ways that you can defend your company against a winding up petition. The sooner you take action, the more likely it is that you can stop a winding up order being issued by the courts (which is much harder to reverse or counteract).
If you have received a winding up petition, you should seek professional advice immediately as you may be able to take one of the following courses of action:
- Pay off the creditor (they will also want the costs of bringing the petition reimbursed too).
- Agree a Company Voluntary Arrangement with the company’s creditors.
- Put the company into administration. Administration creates a moratorium: creditors can’t start or continue legal action against the company without the administrator’s consent or the court’s permission, and no winding up order can be made except on a public-interest or regulator petition. Once a winding up petition has been presented and not yet disposed of, the directors generally can’t appoint an administrator out of court. In that case the directors must apply to the court, or a qualifying floating charge holder can make the appointment without a court order. The bar does not apply if the directors filed their notice of intention to appoint with the court before the petition was presented, unless the petition is a public-interest or regulator petition. If the court makes an administration order, the petition is dismissed.
- Stop or delay the advertisement of the petition. The creditor may agree to an adjournment or to withdraw the petition with the court’s permission, or the company can ask the court to restrain advertisement (for example, where the debt is genuinely disputed). Once the petition is advertised in The Gazette it becomes public, and banks usually freeze the company’s accounts as a matter of practice. Other creditors can then give notice that they will appear at the hearing, and one of them may be substituted as petitioner. Delay does not remove the main risk. If a winding up order is made, any payment or transfer of company property made after the petition was presented is void unless the court orders otherwise (a validation order), even before the petition is advertised. The petitioner must advertise the petition unless the court directs otherwise.
- Dispute the existence or the amount of the debt. This is a very serious step and you should only take it if you have evidence to substantiate it.
- Request that the courts adjourn or cancel the hearing, with a full statement as to why they should do so.
If you do not halt or stop the winding up petition, the courts will hold a winding up hearing where they will consider the petition. If the court is satisfied that the company is unable to pay its debts, it will usually make a winding up order, although it can also dismiss or adjourn the petition or make any other order it thinks fit. On a winding up order the Official Receiver normally becomes the liquidator by virtue of the office, and starts liquidating the company. The creditors or the Secretary of State may later replace the Official Receiver with another liquidator.
Can You Reverse a Winding Up Order?
The short answer to this question is yes, but it is very difficult. There are a few ways that you might be able to reverse a winding up order.
- Rescission Order. A creditor or a contributory (a shareholder), or the company together with one of them, can apply to the court to rescind the winding up order, for example if the debts can now be paid or the company could not attend the hearing. You must make the application within five business days of the order. As at 7 September 2026 the court fee for an application on notice within existing insolvency proceedings is £115, and fees are reviewed regularly, so check the current figure before you file. You will need to attend another court hearing where you will need to argue your case for why the order should be rescinded. The court will rule to uphold or rescind the order as it thinks fit.
- Stay of Proceedings. A stay of proceedings does not rescind the winding up order but stops the compulsory liquidation from proceeding any further. The application can only be made by the liquidator, the Official Receiver, a creditor or a contributory (a shareholder, which often includes the director of a small company), with evidence that the winding up ought to be stayed. The court may ask the Official Receiver for a report first. The court can order for a temporary or permanent stay if it sees fit, or for the liquidation to continue as previously ordered.
- Going into Administration. A liquidator can apply for an Administration Order. If the court makes the order, it must discharge the winding up order and the company moves into administration. The administrator may be the former liquidator or another insolvency practitioner.
- Company Voluntary Arrangement. If creditors approve a CVA (it needs at least 75% by value of those voting, and it fails if creditors voting against it hold more than half of the total value of the unconnected creditors, counting all those whose claims are admitted for voting whether or not they voted), the court may be asked to stay or dismiss the petition. That is a matter for the court rather than an automatic consequence.
Being threatened with a winding up petition?
We can help, but the likelihood of us being able to help you successfully defend your company against a winding up petition very much depends on how quickly we can act after you receive the petition. Call us for a no-obligation discussion on 0208 444 3400.