What is a winding up petition?
A winding up petition (WUP) is a legal action by a creditor to force a company into compulsory liquidation. It is the most serious debt recovery action a creditor can take against your company.
Once served, you typically have 7 days before it is advertised in The Gazette, which triggers bank account freezes and alerts other creditors.
What happens if I ignore it?
Ignoring a winding up petition is extremely risky. After advertisement, your bank will freeze your accounts. The court hearing follows in 6-10 weeks, and if no defence is presented, the company will be wound up and a liquidator appointed.
Frequently Asked Questions
How long do I have to respond to a winding up petition?
You have 7 days from service to act before the petition is advertised in The Gazette. After advertisement, bank accounts are typically frozen immediately.
Can I stop a winding up petition?
Yes. Options include: paying the debt in full, negotiating a payment plan, proposing a Company Voluntary Arrangement (CVA), entering administration, or disputing the debt if there are genuine grounds.
What is a validation order?
A validation order is a court order that allows a company to continue using its bank account after a winding up petition has been advertised. You need to apply to the court with evidence that continued trading won't harm creditors.
How much does it cost to fight a winding up petition?
Costs vary depending on the approach. Paying the debt may be cheapest if funds are available. Legal representation for a court hearing typically costs £2,000-£10,000+. A CVA or administration involves insolvency practitioner fees.