What are the Costs of a Winding up Petition?
If you are a creditor and want to apply to the court to wind up a company that owes you money, you are clearly fed up trying of trying to recover the debt and want to liquidate the company to enforce the repayment. The process of issuing a winding up petition can be quite technical and there are some costs involved.
For this reason, it is worth considering other options, such as seeking the assistance of a debt recovery specialist, to help you recover the debt.
If you have done so, read on to find out more about the costs of issuing a winding up petition.
Costs of Issuing a Winding up Petition
If you have exhausted your options and are owed more than £750, you can apply to the court to have the company wound up. The cost of issuing a winding up petition will be in the region of £2,000, so this is certainly a tactic you should reserve for larger debts.
The costs are made up of:
- A court fee – The winding up petition court fee is £1,880. This is made up of £280 court fees and £1,600 petition deposit to manage the liquidation. However, if the company is not wound up (for example, if the debtor pays up or is clearly insolvent) the £1600 petition deposit will be repaid.
- Process server fee – The cost of serving proceedings in England and Wales is £75-£100.
- Company House search fee – £2 to get accurate debtor details from Companies House.
- Advertisement fee – £79.40 plus VAT to advertise the winding up petition in the London Gazette (if required).
If you choose to instruct a solicitor to act on your behalf, you should also factor in an additional cost of between £400 and £800 to issue the petition.
A Winding up Petition is a final demand letter sent by a creditor to force a company to pay its debt, against the threat of compulsory liquidation by the court.
When a creditor issues a winding up petition it is also advertised in the Gazette, the official journal of public record. From the moment of receipt the debtor has 7 working days to pay the debt, or object. The petition will then be heard in court after which the judge will rule upon the issue, resulting in a Winding up Order, meaning compulsory liquidation, if the creditor’s case is upheld.
It generally takes about 28 days to submit a petition, send it to the court for approval, and actually have it served to the debtor.
Any legitimate debtor who fulfils the criteria can issue a Winding up Petition. You must have a debt of at least £750, and have already issued a 21 day Statutory Demand.
Need help with a Winding Up Petition?
Have you received a Winding Up Petition, or are you looking to issue one? Call Simon Renshaw today and get expert advice on how to handle Winding Up Petitions.