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femi@loftusstowe.com|Companies in England and Wales
A winding up petition is a court application to close the company, for example because it cannot pay its debts. Once it is advertised in the Gazette, the bank usually freezes the company account, so the days before the advert matter most. I am Femi Ogunshakin, an insolvency solicitor. Your first 30-minute consultation is free.
A winding up petition asks the court to wind the company up. One ground is that the company is unable to pay its debts. A creditor owed more than £750 can prove this by serving a statutory demand that is not paid, secured or settled within 3 weeks. A creditor can also show the company cannot pay its debts as they fall due.
Creditors can bring a petition. The company itself, its directors and its shareholders can also petition.
At the hearing the court can dismiss the petition, adjourn it, or make a winding up order. If it makes the order, the official receiver becomes liquidator of the company.
The risk starts before the hearing. Any payment made after the petition is presented is void if a winding up order follows, unless the court orders otherwise. Banks usually freeze the account once the petition is advertised, so the section 127 rule matters to every director.
The petition follows a set sequence. The freeze usually happens at step four.
Act before the advert. The notice cannot appear until 7 clear business days after service, not counting the day of service. HMRC usually waits until the last permitted date, but other petitioners sometimes advertise as soon as they can. A validation order applied for now can be in place before the bank freezes the account.
If you have been served today, get in touch today. The window is measured in business days.
A validation order deals with the payments. It does not deal with the petition debt itself. Depending on the position, the company may also be able to dispute the debt, agree terms with the petitioner, or apply to restrain the advertisement.
Before the advert, the court can allow the petition to be withdrawn. It can do so only if the company consents and no notices supporting or opposing it have been received. Other creditors can give notice to support the petition, and in some situations the court can substitute one of them as petitioner.
Read more on stopping the advertisement or what to do if the company bank account is frozen.
The notice cannot appear until 7 clear business days after service. The day of service and the day of the notice do not count. For example, if the petition is served on a Monday and no bank holiday follows, the earliest notice date is Thursday of the next week. After the advert the account is usually frozen within a day or two, so treat those business days as your deadline.
Any creditor can, including HMRC, a supplier or a landlord. The company, its directors and its shareholders can also present one. See HMRC winding up petitions for how HMRC handles them.
The court fixes the hearing venue when the petition is filed and endorses it on the petition. The advert must appear at least 7 business days before that date.
The petition goes to the hearing and the court can make a winding up order. If it does, the official receiver becomes liquidator of the company.
Yes. A creditor who wants to support or oppose the petition gives notice by 4pm on the business day before the hearing. That is one reason a validation order cannot stop the hearing going ahead.
Before it is advertised, the petitioner can ask the court for permission to withdraw. The court can allow this only if the company consents and no notices supporting or opposing the petition have been received. The application must be made at least 5 business days before the first hearing.
A free 30-minute consultation with me to explore your options and protect your business.
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.
If your company has received a winding up petition, it is important to act quickly. Call or email me to discuss how to apply for a validation order from the insolvency courts. I offer a free 30-minute consultation to help you explore your options and protect your business.
07867 795 439
Email femi@loftusstowe.com
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