Winding Up Petitions (Companies and Partnerships)
What is a Winding Up Petition?
Presenting a winding up petition to the Court is the most serious debt recovery action that can be taken by a creditor. It requires the petitioner to be able to demonstrate that it has a liquidated debt of at least £750 which is not in dispute, this is normally evidenced by a statutory demand which is not set aside or a Judgment of the Court. Winding up petitions may be issued at Court against either a Company or a Partnership, the latter (a petition to wind up a partnership) is usually accompanied by individual bankruptcy petitions for each of the partners. The winding up petition is the precursor to the compulsory liquidation of a company or the dissolution of a partnership if not properly dealt with by the Directors or Partners and in essence means that a creditor is asking the Court to wind up a business and have an insolvency practitioner distribute the assets of that business amongst all creditors.
Winding Up Petition Procedure
Winding up petitions can be issued by any creditor who is owed at least £750 and are most often deployed by Her Majesty’s Revenue & Customs (HMRC). Petitions are in the main issued and then heard at the High Court of Justice, Chancery Division (Companies Court) which is based at the Royal Courts of Justice (Rolls Building) in London. They can also be issued and dealt with at other High Court District Registries or at a County Court with jurisdiction in insolvency matters (if the paid up or credited share capital is below £120,000). LEXLAW Solicitors & Barristers have professional legal chambers in the Middle Temple Inn of Court which is adjacent to the Royal Courts of Justice where the Companies Court is located. This location in the legal heart of London ensures we are able to take urgent instructions and act quickly on behalf of the firm’s clients.
Once a winding up petition is issued by a creditor such as HMRC it is then served on the company usually by a process server visiting the company’s registered office address or sometimes by first class post. Once a petition is served there is very limited time for Directors to act decisively and deal with a company’s debts and the company will urgently need specialist legal advice (and representation at the Companies Court hearing) to help it fight back and ensure the business stays alive. As specialist winding up lawyers, we can help the company to get enough time to manage or settle large debts or to dispute the monies claimed in the petition. With the correct legal guidance it is perfectly possible to obtain time and resolve the debt even if the creditor won’t initially agree to sensible time to pay proposals; there are legal arguments and applications that can be deployed in the company’s favour.
Advertisement of a Winding Up Petition and Validation Orders
Once the company has been served with the petition the creditor can after a period of seven days advertise the petition in the London Gazette. This advert can only be stopped by legal negotiations between the parties or by Court injunction to restrain advertisement. If the petition is nevertheless publicly advertised the Company’s bank accounts will usually be frozen by the Bank as the banks won’t wish to risk falling foul of section 127 of the Insolvency Act 1986. As a result of s.127, upon liquidation any disposal of company property (such as a cheque paid, or an asset sold or transferred) and any transfer of company shares will be of no effect, unless the court orders otherwise. Freezing of a company’s bank accounts can force a company to stop trading. In these circumstances our specialist insolvency counsel help companies to persuade the Court to grant Validation Orders which either generally or specifically permit certain transactions. Validation orders are the only route by which to unfreeze bank accounts.
Performing a Winding Up Petition Search
Prior to issuing a winding up petition, you must always check with the Companies Court as to whether another petition already has already been presented. The first petition is the one that takes precedence (whether advertised or not) and any subsequent petition is likely to be dismissed with an adverse costs order against the petitioner. We can conduct a winding up petition search for our clients who are intending to issue a petition via the Court which will confirm if any liquidation, winding up or striking-off documents have been filed. We will also confirm if any notices have been placed in the London Gazette. If adverse entries are filed,
relevant copies will be provided. We can also do winding up searches for clients that are required to wind a company up and need further information, namely: Date of Incorporation, Any changes of name, Registered Office, Objects, Nominal & Issued Capital, Copy Mortgage Register.
Why use a Specialist Winding Up Petition Solicitor?
The insolvency and Court rules relating to winding up proceedings are a technical minefield; as expert winding up petition solicitors we help our clients to avoid suffering the ‘usual compulsory order’. We assist by protecting the companies interests and by negotiating with creditors and advising and representing the company at Court. Retaining insolvency solicitors and barristers in particular assists in dealings with creditors (such as HMRC) who will know a company is taking matters seriously and responsibly when they instruct ourselves.
Our Winding Up Solicitors get the best results
We endeavour to make the process as stress-free as possible for our clients and seek to eliminate the possibility of business failure. We consider that each client’s case and business is unique, therefore we adopt a bespoke approach tailored to suit individual circumstances. We provide specialist senior legal advice from solicitors and barristers at the outset when it absolutely matters in choosing the best strategy to follow. We are regularly instructed by regional solicitors’ firms to give specialist advice on legal strategy and costs as well as to manage winding up proceedings as agents and as advocates in the High Court. We assist our clients by:
- Opposing or Stopping a winding up petition
- Obtaining an adjournment of winding up proceedings
- Applying for injunctions to restrain advertisement in the London Gazette
- Applying to the Court for validation orders to unfreeze bank accounts
- Liaising with HMRC and other creditors
- Court representation and advocacy before a Registrar or Judge
- Advising the Company or Partnership on winding up petition procedure
- Advising Directors on risks and insolvency routes
- Developing (and aiding implementation of) strategies that allow the business to continue
Company rescue and turnaround advice
We add value by our legal services by guiding clients as to how best companies can be rescued and turned around and how debts can be written off or restructured. We can advise on administration or proposals of either Company Voluntary Arrangements (CVAs) or Partnership and Individual Voluntary Arrangements (PVAs or IVAs). To achieve a company rescue you must act quickly; contact us as soon as possible. The more time available to build an alternative business plan, the more successful it is likely to be. If your company can be saved, whether this is achievable through restructuring or writing off debts, the team at LEXLAW Solicitors & Barristers can help by offering clear, practical and easy to understand advice which deciphers the Insolvency Rules and regime.
Free initial consultation and advice
If you have an insolvency matter or have received a winding up petition and need urgent help, advice or representation we are able to assist. We provide expert legal advice from one of our team of leading Winding Up Petition Solicitors or Barristers. Just call or email us now for a free initial consultation; our team are waiting to help.
To contact us about your case please call us on: 0207 1830 529 or email us on: insolvency-winding firstname.lastname@example.org
Please note: If you have been warned about your file being passed to HM Revenue & Customs’ Solicitor’s Office or have been served a statutory demand or petition do not delay in contacting us as your matter can be handled more effectively the sooner you contact us.
Call us on ☎ 02071830529 or email us on for more information about the legal services we provide. Our team of London lawyers are based in Middle Temple adjacent to the Royal Courts of Justice. We are committed to providing professional and specialist legal advice.