A creditor does not have to try every other way of getting paid before it petitions: it can petition once the company is unable to pay its debts. Even so, it is a costly process for the creditor. As at 18 August 2026 the court fee is £352 and the petition deposit is £2,600, a basic total of £2,952 before service, advertising and legal costs.
In addition, the creditor will have spent several thousand pounds in legal costs and depending on the nature and complexity of the debt and whether you decide to appoint your own solicitors to defend it, will result in an expensive day out in court.
What Happens When a Winding up Order is Issued?
If your company has received a winding-up petition from a creditor or HMRC, a court hearing date will be set to hear the petition. At the hearing, the judge will consider whether the debt is actually due and establish whether the company can pay. If the company is shown to be unable to pay its debts, the court may make a winding-up order, though it can also adjourn or dismiss the petition. Once the order is made, the company is in Compulsory Liquidation.
The Winding up Petition Court Hearing
If you decide to oppose the petition, you will need to file in court a witness statement that will demonstrate the grounds of your opposition. A copy of this witness statement will also need to be sent to your petitioning creditor.
A creditor or contributory (broadly, a shareholder) who intends to appear at the hearing must deliver a notice of intention to appear to the petitioner, so that it arrives by 4pm on the business day before the hearing. Anyone who misses this can appear only with the court’s permission. The notice must say whether they intend to support or oppose the petition and, for a creditor, the amount and nature of the debt (for a contributory, the number of shares held).
If you are successful in dismissing the winding up petition, then unless the court directs otherwise the petitioner must give notice of the dismissal as soon as reasonably practicable, normally in the London Gazette. If the petitioner has not done so within 21 days of the hearing, the company can gazette the notice itself.
What is Involved in a Winding up Order?
The judge will consider the evidence presented. If the company is shown to be unable to pay its debts, the judge may make a winding up order.
Once a winding up order has been made, the court will as soon as reasonably practicable, give notice of the fact that the company is in Liquidation to the Official Receiver.
The Official Receiver will receive the sealed copy of the winding up order and will then send it to Companies House for filing and then advertise the Liquidation in the London Gazette.
What is the Winding up Process?
(i) The Official Receiver will normally become the liquidator of the company. The exception is where the order follows straight on from an administration or is made while a CVA supervisor is in office, when the court may instead appoint the former administrator or the supervisor. The Official Receiver decides which directors or officers to question, normally by sending a preliminary information questionnaire (PIQC) to complete, and can require any of them to attend an interview, which can take place in person, at your home, or by telephone. The format and extent of the enquiries depend on the case.
(ii) The Official Receiver will now have the duty of investigating into the company affairs for any signs of misconduct or insolvent trading. As a director you can be personally liable for any actions deemed to be a breach of your fiduciary duty as a director.
(iii) Your powers as a director will now cease and you will have a duty to co-operate with the Official Receiver in relation to disclosing all financial information concerning the company. Failing to co-operate without a reasonable excuse is an offence punishable by a fine. The Official Receiver can also ask the court to summon you or to hold a public examination. If you then fail to attend without a reasonable excuse, or abscond, the court can issue a warrant for your arrest and the seizure of any company books and papers in your possession.
(iv) The liquidator will take control over the company’s assets.
(v) Employees are dismissed by virtue of the winding up order. If the Official Receiver or liquidator keeps some staff on to carry on the business for the purposes of the winding up, their old contracts still end on the date of the order and they work under new contracts from then. Employees claim any arrears of wages, holiday pay, redundancy pay and pay in lieu of notice from the Redundancy Payments Service. They make the claim online, using the case reference number supplied by the office-holder.
Once a winding up order is made, the winding up is normally treated as starting on the date the petition was presented. The exception is where the company had already passed a resolution for voluntary winding up, in which case the winding up starts at that resolution. Any distress or execution against the company’s assets after that date is void. A disposal of company property, including a payment out of the company’s bank account, is also void unless the court orders otherwise, which is why a company facing a petition can apply for a validation order. The Official Receiver will therefore consider pursuing remedies to undo these transactions.
How Serious is a Winding up Order?
Extremely serious. A winding up order can be a stressful time for any director and part of this anxiety is the uncertainty over an insolvency process which you cannot control. Unlike in a Creditors’ Voluntary Liquidation, where the company may nominate a liquidator and the creditors make the final choice, in a Compulsory Liquidation the Official Receiver normally becomes liquidator. If the Official Receiver later seeks nominations for a replacement, a director who is also a shareholder can nominate one as a contributory, but the creditors’ nominee takes priority.
The Official Receiver is an officer of the Insolvency Service and will investigate your director’s conduct and you may face potential director disqualification proceedings.
Since 1 October 2015, the court can also make Compensation Orders against disqualified directors. The Secretary of State may apply for one only within two years of the disqualification order or undertaking. This can result in a director being made to contribute to the insolvent estate in the event that it is proven that the loss to creditors arose as a result of their misconduct as a company director.
Can a Winding up Order be Stopped or Reversed?
Although it is uncommon, it is possible for a winding up order to be reversed in a number of ways. However, this will undoubtedly be an expensive process as you will need to instruct both solicitors and other professionals to assist in this process.
i. Rescission Order
Once your company has been wound up you will be sent a copy of the winding up order to the registered office address. An application can be made to the court to cancel (‘rescind’) the winding up order, for example if the company is now able to pay the debts owed or could not attend the original hearing.
Time is short. In England and Wales the application must be made within five business days of the date the order was made (Insolvency (England and Wales) Rules 2016, rule 12.59(3)). The clock runs from the order, not from the day the copy reaches the registered office, so if rescission is realistic, take advice the day the order is made.
The application is made by an insolvency application notice on Form IAA (rule 1.35), supported by a witness statement setting out the company’s assets and liabilities, with a draft order attached. The Insolvency (England and Wales) Rules 2016 prescribe the required content rather than mandating a specific numbered form as the old rules did with Form 7.1A, but Form IAA is the HMCTS template for this application and the document courts expect. Your argument will usually be that the court did not have all the relevant information when it made the order, and you will need to persuade a judge to reverse it.
You must apply within five business days of the order, and file in the same court that made it. As at 7 September 2026 the court fee for an application on notice within existing insolvency proceedings is £115. Court fees are reviewed regularly, so check the current figure in the civil court fees schedule (EX50) before you file.
Once you file the witness statement you will get a court hearing date (normally in 1-2 weeks’ time) and you will need to give notice of the application to the petitioning creditor, any creditor who supported or opposed the petition, any insolvency practitioner already in office and the Official Receiver.
At the hearing you will need to explain to the judge why you consider that the order should be rescinded and either the Winding up will be allowed to continue or alternatively a rescindment order will be made.
ii. Stay of Proceedings
Another possible route, once a winding up order has been made, is an application for a ‘stay of proceedings’. This is an order by the court to stop the liquidation from proceeding any further; it does not cancel the winding up order itself. This application can be made at any time after the order and the court may order that the winding up be stayed either permanently or for a specific period of time.
In these cases, the Official Receiver, a Liquidator, a creditor or shareholder of the company may make this application for a stay of proceedings.
iii. An Application For Administration Can Discharge A Winding Up Order
A Liquidator (or a qualifying floating-charge holder) can make an application for an Administration Order. Under Schedule B1 of the Insolvency Act 1986, the court then decides whether to make an Administration Order — making the application does not by itself end the liquidation. The court can make the order only if it is reasonably likely to achieve one of the purposes of going into Administration. If the court makes the order, it must also discharge the winding up order.
iv. Company Voluntary Arrangement
A Liquidator can propose a Company Voluntary Arrangement. Under rule 15.34 of the Insolvency (England and Wales) Rules 2016, the Proposal is approved if three-quarters or more in value of the creditors responding vote in favour. It is not approved if more than half of the total value of the unconnected creditors, meaning all those whose claims are admitted for voting, whether or not they voted, vote against it. If the Proposal is approved, the court may then make an order staying all proceedings in the winding up, but not until 28 days after the approval has been reported to the court, and not while a challenge to the decision is pending.
It is therefore imperative that you act fast and as soon as you receive a statutory demand or a winding up petition that you take immediate action and contact us at AABRS® for professional advice. The chances of rescuing your business are increased if you take matters in to your own hands at the earliest stage.
What Happens After a Winding up Order?
Once the order has been granted, the Official Receiver normally becomes the liquidator of the company automatically, by virtue of the office, without any separate court appointment. The OR will deal with creditors, investigate the actions of the directors in the period running up to the insolvency, or they may recommend the appointment of an insolvency practitioner.