In the latest of our recap series on the most frequent insolvency procedures we look at the unique Winding Up Petition. 

This is different from the other procedures we’ve covered as it is classified as being a compulsory liquidation.  

A winding up petition is not generated by directors – instead it’s their creditors seeking to close the business down in an attempt to have assets realised and recoup some of the arrears they’re owed. 

Why would you receive a winding up petition or statutory demand in the first place? What can you do if you receive one? If you want to close your business anyway, isn’t it easier to let your creditors take the driving seat and close this way than liquidate yourself? 

We answer all these frequently asked questions and more.


The recent story of Winding Up Petitions

201920202021202220232024 (to date)
Winding Up Petitions3,0511,3864832,0572,9282,497

Figures from the London Gazette 

In the first year of the COVID-19 pandemic the number of winding up petitions almost  halved in comparison to the previous year (2019), dropping by 45%. 

The figures continued to drop even further in 2021 by 65% as the government introduced a suspension of creditors actions, including winding up petitions and statutory demands, with the aim to help businesses recover. 

However they recovered in 2022 resulting in a sharp spike, with the number of WUP more than quadrupling (425%) and having consecutively risen the years following with them expecting to reach or exceed their pre-Covid levels by the end of 2024.

Why have I received a winding up petition?

  • Unpaid Debt

The most common reason for a winding-up petition is non-payment of debt. If a creditor has not been paid for goods, services, or other liabilities and believes that your company is unable to pay its debts, they may file. It’s important to note creditors will often only use a winding-up petition as a last resort.

You may also receive a winding-up petition if you have outstanding tax obligations, such as VAT, PAYE, or corporation tax. In fact HM Revenue and Customs (HMRC) is the most common petitioner, issuing around 60% of all Winding Up Petitions.

  • Statutory Demand was ignored 

Before filing a winding-up petition, the creditor might have served you with a statutory demand. This is a formal request for payment, and if it remains unpaid or unacknowledged for 21 days, the creditor may take further legal action, including applying for a winding-up petition.

  • Repeated attempts to collect payments have failed 

A creditor may have made multiple attempts to recover the debt, either through sending reminders, negotiating payment terms, you may have even had bailiffs at your door. They may conclude that winding up the company is the only way to recover the funds if you have either failed to respond or have not been able to pay.

  • Failure to comply with a court judgement 

If a creditor has previously obtained a County Court Judgment (CCJ) or other court ruling against you but you’ve failed to comply, they may escalate the matter by filing a winding-up petition.

  • Lack of communication

Sometimes, a winding-up petition is filed because the company fails to communicate effectively with its creditors. If creditors feel ignored or that no reasonable efforts are being made to settle the debt, they may take more aggressive action.

  • Mismanagement or Fraud Allegations

In rare cases, a winding-up petition may be taken out due to allegations of mismanagement, fraud, or other wrongdoing within the company. If there are concerns that the company is being run improperly or assets are being misused, creditors may act to protect their interests by seeking liquidation.

A typical winding up petition timeline

  • Winding up petition filed in court

A creditor or their legal representatives will go to court and file a winding up petition against you for the amount owed. They will pay a fee and a legal deposit at the same time. 

Some creditors will issue a statutory demand against you in the first instance but this is not an essential step – some may go straight for a winding up instead.

  • The court agrees on a hearing date

If the petition is accepted by the court they will then set a hearing date and time. This is set down in the winding up petition before it is returned to the petitioning creditors with the hearing date usually held between four to eight weeks from when the court makes its decision.

  • The creditor serves the petition

The winding up petition will be served on a business either at its registered address or by hand to an officer of the company. It will include all the legal details including the amount of the outstanding debt as well as the time, date and location of the hearing.

  • The winding up petition is advertised

Once you receive a petition then you have seven business days to take action before it is publicly advertised in the London Gazette. This will alert other creditors of the situation and they may decide to join the petition to make a claim for their own debts. 

Your bank may also become aware who could then freeze any business accounts making trading practically impossible.

  • The winding up petition hearing

The court will consider the creditors submissions and either dismiss the petition, adjourn the hearing to a later date or make a winding up order to place the company into compulsory liquidation with assets to be sold and any monies realised to be distributed to creditors. 


If you receive a statutory demand or a winding up petition then you do have some options available to you. 

Winding up petition options 

  • Pay the debt in full

The most straightforward way to stop a winding-up petition is to settle the lawful debt with the creditor. If you can pay the debt in full within seven days, including the costs of the petition, then the process can be halted.

  • Apply for an adjournment

If you feel you could reach an alternative repayment arrangement with your creditor then you may request the court to adjourn the hearing. This will give you a sufficient period of time to decide how you want to proceed. Be aware that this will only be granted if the court believes there’s a reasonable chance of resolving the issue. 

  • Time to Pay (TTP) Arrangement or a Company Voluntary Arrangement (CVA)

If the creditor is HMRC and your business will be able to pay the debt but not immediately, it may be possible to come to a formal payment agreement with them known as a Time To Pay (TTP) arrangement. If there are multiple creditors and the business is otherwise viable then a Company Voluntary Arrangement (CVA) could be a preferable solution.

  • Administration 

If the business needs more time to consider its options then it can apply to go into administration. This would halt all creditor actions against it including winding up petitions giving directors valuable breathing space to determine the best way forward. 

  • Creditors Voluntary Liquidation 

If the company is insolvent and there seems to be no realistic prospect of recovery then directors will still be able to consider a Creditors’ Voluntary Liquidation (CVL). This is a controlled way to close the business compared to compulsory liquidation and allows for some management and control of the liquidation process.


We hope this has helped explain some of the complexity and confusion around winding up petitions for you but if you have any more questions then please get in touch with us

If you’ve received a statutory demand or a winding up petition then you should also act quickly to arrange a free initial consultation as time is of the essence.