How to Stop a Winding Up Petition Being Advertised

A brown envelope being handed across a desk

Why is the Gazette advert the real deadline?

The hearing date is on the petition, but the advert comes first and does the damage. Banks usually freeze the company account on the day of the notice or within about 48 hours. After that, wages, rent and suppliers cannot be paid from the frozen account.

What the advert does

Unless the court directs otherwise, the petitioner must give notice of the petition in the Gazette. The notice names the petitioner, the date the petition was presented and the hearing venue.

It also tells other creditors how to give notice that they will appear at the hearing. Once the petition is advertised, the petitioner can no longer withdraw it on a without-notice application. In some situations the court can also substitute another creditor as petitioner.

What has already happened

The legal risk starts earlier than the advert. A payment made after the petition is presented is void if a winding up order follows, unless the court orders otherwise.

So a petition that is served but not yet advertised still matters. The account works for now, but every payment out is exposed. This is what section 127 means in practice.

A worked example of the countdown

Served on a Monday

Say the petition is served on a Monday, with no bank holiday in the next fortnight. Business days 1 to 4 are Tuesday to Friday of that week. The weekend does not count. Business days 5 to 7 are Monday to Wednesday of the next week. The earliest the notice can appear is Thursday of the next week.

That is ten calendar days after service. A bank holiday in the period pushes it back a day. Check the exact count with me if the dates are tight.

Who advertises when

HMRC usually waits until the last permitted date while settlement proposals are considered. Other petitioners sometimes advertise as soon as the waiting period ends.

Plan for the earliest date, whoever the petitioner is. If HMRC is the petitioner, see HMRC winding up petitions.

Can you stop a winding up petition being advertised?

Sometimes, but nothing guarantees it. These are the routes, and each depends on the facts and on the court.

Settle with the petitioner

Pay the debt or agree terms. Before the advert, the petitioner can then ask the court for permission to withdraw. The court can allow it only if the company consents and no notices supporting or opposing the petition have been received.

Injunction to restrain the advert

If the debt is disputed in good faith on substantial grounds, the company can ask the court to stop the advert. The application goes to the court where the petition is pending.

Validation order

This does not stop the advert. It asks the court to allow named payments, such as wages, so they are not void if a winding up order is made.

The first two routes try to stop the advert. The third protects the payments if the advert goes ahead. A company may need to run them side by side.

When an injunction is realistic

The court does not let a winding up petition be used to decide a substantial dispute raised on genuine grounds. Holding back money the contract does not allow you to hold back is not a genuine dispute.

The court looks at the evidence. In one reported case the company's application failed because the dispute was not shown to be substantial.

Does paying the debt automatically stop it?

Not automatically. The petition still has to be withdrawn with the court's permission, or dismissed by the court. If the petitioner consents to withdraw or to dismissal, the court can substitute another creditor as petitioner.

That is why the timing matters. Withdrawal without notice is only possible before the advert and before any other creditor gives notice.

Should I apply for a validation order before the advert?

If the advert may go ahead, yes. The company can apply once the petition has been presented, so it does not need to wait for the freeze.

What to do this week

Note the date of service and the hearing date shown on the petition.
Count 7 business days, starting the day after service. The earliest advert date is the next business day after the seventh.
Check the Gazette every business day until the hearing.
List the payments due before the hearing: wages, rent, suppliers.
Gather the latest accounts, management accounts and bank statements.
Call me. The consultation is free and you do not need to send papers first.

If you have been served today, get in touch today. The window is measured in business days.

What the court looks for

The application is backed by a witness statement from a director who knows the company's finances well. It includes a cash flow forecast and a profit and loss projection.

The court needs credible evidence that the company is solvent, or that the payments will not prejudice unsecured creditors as a class. If urgent payments such as wages cannot wait for the full evidence, the court may grant limited relief for a short period.

Read more about how a winding up petition works, or go back to the validation order home page.

How do I check whether a winding up petition has been advertised?

Search the Gazette

Open the Gazette's petitions to wind up companies search.
Type the company name or company number into the search box.
Set the publication date from the day the petition was served.
Check under notice code 2450, "Petitions to Wind Up (Companies)".
Repeat every business day until the hearing.

If you find a notice

The notice shows the petitioner, the date the petition was presented and where the hearing will be. Expect the bank to act on the day or within about 48 hours.

Call me straight away and say so when you call. If the account is already frozen, read company bank account frozen.

Stopping a winding up petition: questions

How do you stop a winding up petition?

Before the advert, the main routes are settling with the petitioner so it can withdraw, or an injunction if the debt is genuinely disputed. Neither is guaranteed, so a company may also apply for a validation order to protect essential payments.

When can a winding up petition be advertised in the Gazette?

Not until 7 clear business days after service on the company, and at least 7 business days before the hearing. The day of service and the day of the notice do not count. Served on a Monday with no bank holiday, the earliest is Thursday of the next week. Weekends and bank holidays are not business days.

Can the advertisement of a winding up petition be prevented?

Sometimes. The court can restrain the advert where the debt is disputed in good faith on substantial grounds. The court decides on the evidence, and applications can fail.

Does paying the debt automatically stop a winding up petition?

No. The petition must still be withdrawn with the court's permission, or dismissed by the court. If the petitioner consents to withdraw, the court can in some situations substitute another creditor as petitioner.

What is an unadvertised winding up petition?

It is a petition that has been presented and served but not yet published in the Gazette. Payments made after presentation can still be void if a winding up order follows.

Can you stop a winding up petition after it has been advertised?

Withdrawal without notice is no longer available once it is advertised. At the hearing the court can still dismiss or adjourn the petition.

Can other creditors take over or join the petition?

Yes. A creditor can give notice to support the petition by 4pm on the business day before the hearing. The court can also substitute a creditor as petitioner in some situations.

How do I check whether a winding up petition has been advertised against my company?

Search the Gazette's notices by company name or number, under notice code 2450 for petitions to wind up companies.

A single sheet of paper and a fountain pen under a desk lamp

First consultation

Free

A free 30-minute consultation with me to explore your options and protect your business.

What the consultation covers

Where the petition is in the process and how many business days you have
Whether a validation order would help, and whether an application is likely to succeed
Whether an adjournment can be sought while you consider how to settle the debt
Your other options: a Time to Pay arrangement with HMRC, raising finance to settle the petition debt, or placing the company into voluntary liquidation
What happens next if you decide to instruct me

The fixed fee for a validation order application is £10,000 to £15,000 plus VAT, depending on the size of the petition debt. See the full fee breakdown.

Who you will deal with

Femi O. Ogunshakin

Solicitor, Tax Adviser and Former HMRC Inspector

Validation order applications are a large part of my practice. Most of the petitions I deal with are brought by HMRC, and my time as an HMRC inspector means I know how the petitioning side builds and runs these cases.

You will deal with me directly rather than with an introducer or a case handler. The work is carried out through Nexa Law, where I practise. The first 30 minutes are free.

How to stop a winding up petition being advertised

How long after service can a petition be advertised?