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Stop a winding-up petition

Has your company been issued a winding-up petition, but you’re not quite sure what to do?  A winding-up petition represents the most severe legal action a creditor can take against the company. If you don’t stop a winding-up petition, ultimately it could mean the collapse of the business and a cease in trading. A petition leads to a court hearing,  can result in a winding-up order, effectively putting your company into compulsory liquidation.

It is important to act fast

If you have received a winding-up petition, it should not be ignored. It represents a serious commitment by a creditor to get what they’re owed or put your company out of business. After seven days the company’s situation regarding the winding up petition will be made public, leading to the company bank accounts being frozen. This will put a halt to all trading, as well as potentially stopping any directors from disposing of assets or borrowing against company assets. So, it’s hugely important to know the best way to respond.

We can offer you professional advice to quickly handle the situation. If you take immediate action, you have the best chance of stopping the petition.

What are my options

It can be a nervous time when issued with a winding-up petition. There is the serious prospect of having your company wound up and liquidated, especially if there are multiple creditors. However, there are rescue options and things you can do, but the best thing for your company is to act as quickly as possible.

Pay the petition

If the business has the means to pay off the petitioning creditor, you can do so, but we would always recommend arranging this through an insolvency specialist. Once the petition has been issued you should be very cautious about the movement or transfer of any company assets as these may be recovered by the liquidator should a winding-up order be subsequently obtained.

stop a winding up petition

Dispute the debt

A legitimate dispute against the validity of the debt could enable you to apply for an injunction, but this can only be done if you genuinely believe the petition is incorrect. To go down this route, however, you would need help from a qualified solicitor or licensed insolvency practitioner.

If an agreement to adjourn is made with the courts, it will allow an insolvency professional more time to determine if the business is suitable for administration. This, in turn, may result in a pre-packed sale or a company voluntary arrangement (CVA), but it will temporarily put a halt to legal procedures against your company, whilst restructuring possibilities are looked at.

Formal repayment plan

A formal repayment plan will only be an available option if the business is at the early stages of a winding-up petition and it has not been advertised in the Gazette. A CVA would allow you to come to a repayment plan with your creditors, where the company can pay off its debts in affordable monthly repayments, over a set period. Typically, they last around five years but can be longer or shorter.

There must be at least 75% of creditors by value agree to the CVA. Often at this point, creditors will just be thinking about what will get them their maximum return on investment, so they may want to push on with the winding-up petition and see the company head into liquidation or agree to a potential CVA.

See more on CVAs


Administration is a restructuring option, but it is only a viable solution if there is a genuine possibility of getting a greater return for creditors. This could be through completing ongoing work or selling some of the company’s assets. It provides the company with breathing space as during an administration the company is temporarily protected from creditors. Just as with a CVA, a company cannot go into administration after it has been advertised in the Gazette.

Any formal arrangement that the company enters, must be agreed to by 75% of the creditors by value.

Find out more about Company Administration

What happens if I don’t act?

If you do not act when the petition is first issued, your company could be in serious trouble as it faces the prospect of compulsory liquidation. Seven days after the petition is issued it will be made public knowledge by being published in the London Gazette. Once public, the company will be forced to cease trading, with all bank accounts frozen, regardless of whether they are in credit or not.

In summary

A winding-up petition can be stopped, if it is acted on quickly. It’s not always possible to save your company and unless there is the appropriate response, it will be liquidated. There are rescue solutions available and in some circumstances, the company can be salvaged, however, the right action must be taken as soon as you’re aware there is a winding-up petition against your company.

How we can help

If you have been issued a winding-up petition you could be facing the prospect of losing your company completely. Without taking any action you could face a winding-up order and then the opportunity to choose your own liquidator. In this situation, it’s esential to contact a licensed insolvency practitioner such as ourselves as quickly as possible. We could potentially prevent a compulsory winding-up order, or we can work on finding the best alternative solution for your company.

Beverley Horton

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