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What is the timeline order of the stages of a Winding Up Petition?

  1. A creditor (or creditors) who is owed money that has not been paid will attempt to recover that debt using standard techniques which may ultimately end with a Statutory Demand. If these attempts fail then an application can be made to the court to close or ‘wind up’ a company, also known as compulsory liquidation. The obligation of the petitioner is that they must be owed GBP 750 or more, and they can show that the company cannot pay its debts.
  2. The winding up petition application process then starts. The creditor issues a petition at court and the winding up petition must then be served to the debtor company, usually at its registered office.
  3. Once this has been done the petition is known as an unadvertised winding up petition until it is advertised in the London Gazette. After a minimum of seven days from the petition being served and no earlier than seven days before the court hearing, the petition is then advertised in the Gazette, thus making it a public matter. This allows other creditors to join the petition (as there can only be one active at any one time) using what is known as a ‘notice of support’.
  4. If the debtor company settles the debt, and the petition has not yet been advertised in the Gazette, then the petition can be withdrawn with permission from the court. However, the following conditions apply:
                  
    1. The hearing of the application to withdraw is at least five business days before the hearing of the petition.
    2. The petitioner has not yet given notice of the petition under rule 7.10 (advertised in the Gazette).
    3. No notices (in support of or in opposition to the petition) have been received by the petitioner.
    4. The debtor company consents to the withdrawal of the petition.
  5. If the debtor company settles the debt after the petition has been advertised in the Gazette then that will remove the debt from the petition, but the debtor company will still have to abide by its legal obligations imposed upon it, such as its bank account remaining frozen. Additionally, other creditors could join the still active petition using what is known as a ‘notice of support’.
  6. If the petition is not withdrawn then at the hearing, if the court decides that the debt is valid and that the debtor company is insolvent and cannot pay its debts, a Winding Up Order is issued, and this starts the process of compulsory liquidation. Otherwise, the winding up petition is dismissed.