What to do when your company receives a winding-up petition

What has actually happened

A creditor has asked the court to wind your company up, usually because it says a debt is due, undisputed and unpaid. A hearing date has been fixed. Nothing has been decided at that hearing yet, and the company can oppose the petition, negotiate it away or restructure.

The petition is normally served at the registered office. The date of service matters more than any other date in the file, because most deadlines run from it.

The first 48 hours: a practical order of events

Work through the petition itself before instructing anyone. The petitioner's name, the amount claimed, the court reference and the hearing date all need checking against your own records.

• Note the exact date the petition was served and diary the hearing date.
• Check whether the debt is genuinely owed, partly disputed, or already paid.
• Gather bank statements, invoices, purchase orders and correspondence for the period in dispute.
• Tell your bank nothing until you have advice — but expect them to know, because petitions are advertised.
• Do not pay one creditor ahead of others while the petition is live; that can be challenged later as a preference.
• Instruct solicitors or an insolvency practitioner the same week. Delay is the single most common reason companies lose options.

Deadlines that matter

If the company intends to oppose the petition, notice must be given to the court and to the petitioner's solicitors promptly, and the rules and the petition's own endorsement set the exact times. As a working rule, assume days rather than weeks and confirm the dates with the court office.

The petitioner must advertise the petition in The Gazette at least seven business days before the hearing. Advertising is what freezes bank accounts and reaches customers, so anything that stops or postpones it buys real protection.

Fight, negotiate or restructure

Where the debt is disputed on genuine grounds, the answer is usually to challenge the petition and, where relevant, the statutory demand that came before it. Where the debt is owed, the practical question is whether it can be paid, secured or compromised in a way the petitioner will accept and confirm in writing.

Insolvency routes — a company voluntary arrangement, administration, or a controlled wind-up — are not a last resort. Used early, they protect directors and preserve more value than a defended hearing that fails.

What usually decides the outcome

Three things: the speed of your response, the quality of the documentary evidence, and whether you engage the petitioner's solicitors directly rather than through the court. A company that answers within days almost always has more options than one that waits for the hearing.