Facing a Winding-Up Petition? Expert Defense & Guidance

Court-ordered closure is forced by creditors through legal proceedings. The company has no choice, and the Official Receiver is appointed by the court to manage the process. It's public, involves mandatory investigations, and offers less control.

Voluntary closure is initiated by directors or shareholders. You choose your liquidator, have more control over the process, and it's generally less publicly scrutinized. It's usually faster, less expensive, and looks better for directors.

The timeline typically follows these stages:

• Statutory demand to petition: 21 days
• Petition to hearing: 7-21 days
• Asset realization: 6-12 months on average
• Complex cases: Can take 2+ years

The actual duration depends on the complexity of the company's affairs, asset realization, and investigation outcomes.

Yes, it's possible to halt proceedings, but you must act quickly. Options include:

• Pay the debt in full: Including costs and interest
• Negotiate a settlement: Get the creditor to withdraw
• Challenge validity: If you dispute the debt or process
• Alternative procedures: Enter CVA or administration

Once the court makes an order, it's much harder (but not impossible) to reverse. Act immediately when you receive a statutory demand or petition.

Generally, directors are protected by limited liability, but you CAN be held personally liable in these situations:

• Personal guarantees: If you personally guaranteed loans or credit
• Wrongful trading: Continuing to trade when insolvency was known
• Fraudulent trading: Trading to defraud creditors
• Director loan accounts: Overdrawn loan accounts are personal debts
• Misfeasance: Breach of fiduciary duties or misappropriation

Early professional advice helps you understand your exposure and take steps to protect your personal assets.

When a winding-up order is made, all employees are automatically dismissed. However, they have legal protections:

• Priority creditor status: Wages owed (up to £800) are priority debts
• Redundancy payments: Paid by the National Insurance Fund if company can't pay
• Notice pay: Employees can claim statutory notice pay
• Holiday pay: Accrued but untaken holiday can be claimed

The liquidator will provide employees with the necessary claim forms for the Redundancy Payments Service.

Costs are paid from company assets and typically include:

• Court fees: £280 petition fee plus £2,600 deposit
• Official Receiver fees: Charged on time spent basis
• Liquidator fees: If appointed, percentage of assets realized
• Legal costs: If you challenge the petition or hire representation

If the company has no assets, the costs may fall to the petitioning creditor. Directors aren't usually responsible for these costs unless found personally liable for company debts.