A winding-up petition is a formal request to the court to liquidate a company that cannot pay its debts.
It’s an absolute last resort for someone who is owed money. You serve someone with a winding up petition if they’re just unable or unwilling to pay you the money they owe, forcing their company to close so that the assets can be sold off and you can get (some of) your money.
Serving the petition correctly is essential to avoid delays and ensure the process goes smoothly. And so there’s a good chance that you’ll need the help of process servers in Widnes or wherever you’re based in Cheshire if you’re looking into this option.
But in case you’re at the first steps of this process, here’s a look at everything you need to know about serving winding-up petitions.
1. Confirm Grounds for the Petition
Before starting, the actual process of the winding-up order, you need to check that the grounds for a petition are in place:
- The company must owe you £750 or more in unsecured debt. You can’t wind up a company for debts lower than this.
- You’ve issued a statutory demand or obtained a court judgment against the company for the debt, and they’ve still failed to pay within the agreed timeframe.
It’s important to confirm these conditions are met, as any mistakes here could delay proceedings or result in the petition being dismissed. It can be frustrating if you’re owed money, but it’s better to take it slowly and do it right.
2. Draft the Winding-Up Petition
Next, complete the winding-up petition form, which you can get from the government’s website. Make sure that you include:
- A Statement of Truth, verifying that the petition details are accurate.
- Information about the unpaid debt, such as the amount owed and the efforts you’ve made to recover it. It’s always a good idea to document every action you’ve taken with a debt.
Some creditors prefer to hire a solicitor to help prepare this document to ensure accuracy, as mistakes at this stage can lead to delays. Of course, that’ll depend on your budget and the amount of money you’re owed.
3. File the Petition with the Court
Once prepared, the petition must be filed with the court. This involves:
- Paying the court fee (£302) and Official Receiver’s deposit (£1,600).
- Submitting the petition along with any supporting documents, like the statutory demand or judgment.
Upon filing, the court will assign a hearing date. Be sure to keep a copy of the stamped petition and hearing details.
4. Serve the Winding-Up Petition
Now comes the crucial step – serving the petition on the debtor company. This must be done at least 7 business days before the hearing. And this is where you may need the help of a private investigator such as our team at EJM Investigations. There are two options:
- Personal Service at the Registered Office: The petition should be served personally at the company’s registered office address. This is typically the address listed with Companies House.
- Serving an Absent or Evasive Company: If you’re unable to serve the petition in person because the company is avoiding service, you may apply to the court for substituted service. This could involve posting the document at the registered office or sending it to an alternative address. The court must approve this method, so don’t just skip ahead to this stage.
5. Advertise the Petition in The Gazette
At least 7 business days after serving the petition and no fewer than 7 business days before the hearing, the petition must be advertised in The Gazette, the official public record for insolvency notices.
This alerts other creditors to the potential winding-up, giving them a chance to join the petition if they wish.
Failure to advertise in The Gazette can lead to delays or even dismissal of the petition, so make sure this step is not overlooked.
Understandably, someone else joining the petition might restrict the money you can recoup, but there’s nothing you can do to avoid this, and it’s fair that everyone gets their share.
6. File a Certificate of Service
After serving the petition, you’ll need to file a Certificate of Service with the court. This certificate proves that the petition was served on time and in the correct manner, so that the hearing can proceed. This should ideally be filed within 5 business days of service.
7. Attend the Hearing
The court hearing is the final step, where a judge will review the petition and decide whether to grant a winding-up order. The creditor should ensure all documents are in order and procedural requirements have been met ahead of this date.
If the company wants to contest the petition, they’ll need to file their response with the court. Make sure you’re prepared to address any potential disputes during the hearing.
Consequences for the Company
Once the winding-up petition is served, the company’s bank accounts may be frozen, and they might struggle to conduct normal business activities. Other creditors may also become aware of the petition once it’s advertised, which can put additional pressure on the company.
Evasive Companies
If the company is difficult to serve, consider using a professional process server. A private investigator is often your best bet, because they aren’t just trained in the legal process, but they have the best chance of enacting personal service.
They have the expertise to locate company representatives and ensure the petition is served legally. This can be crucial if the company is deliberately avoiding service
By carefully following these steps, you can ensure that the winding-up petition is served correctly, avoiding unnecessary delays and increasing the likelihood of a successful outcome in court.
If you’re in need of process serving in Runcorn for a winding up petition or for any legal documents, give our team a call on 01772 334700 and we’ll be happy to discuss your requirements with you.