What a winding-up petition is
It is an application to the court to place a company into compulsory liquidation on the ground that it is unable to pay its debts, under section 122(1)(f) of the Insolvency Act 1986. If the court makes the order, the company stops trading, control passes to a liquidator, and the company's assets are collected and distributed among creditors in the order the statute sets.
The minimum debt is £750. That is low, and it misleads people. The threshold tells you when you are *allowed* to petition. It says nothing about whether you should, and for most debts near that figure the answer is no — the cost of presenting exceeds anything a £750 debt can return.
You do not need a statutory demand first
This is the most common misconception, and it costs creditors three weeks. Section 123 sets out several ways a company is deemed unable to pay its debts. An unsatisfied statutory demand for more than £750 is one. A judgment returned unsatisfied — execution issued and come back with nothing — is another. So is proof to the court's satisfaction that the company cannot pay as debts fall due.
So if you already hold a county court judgment the company has ignored, you may not need to serve a statutory demand at all. Where the debt is plainly owed and simply unpaid, the demand is still usually worth doing: it is cheap, it creates clean evidence, and a good number of companies pay within the 21 days rather than face what follows.
- 01
Check the debt qualifies
Over £750, due and payable now, and — the part that matters — not genuinely disputed. Check at Companies House that the company is still live and not already in liquidation or subject to a moratorium.
- 02
Establish inability to pay
An unsatisfied statutory demand after 21 days, an unsatisfied execution on a judgment, or other evidence the company cannot pay as debts fall due.
- 03
Present the petition
Filed at the appropriate court with the court fee and the Official Receiver's deposit. Both are paid by you, in advance. Presentation is the point from which s.127 bites.
- 04
Serve it on the company
At the registered office, in the manner the Insolvency Rules require. Service that cannot be proved is service that did not happen.
- 05
Advertise in The Gazette
Not less than seven business days after service, and not less than seven business days before the hearing. Advertising early or late gets the petition dismissed or adjourned — and this is the step that alerts the bank.
- 06
Hearing
Typically some weeks after presentation. The court may wind the company up, dismiss, adjourn, or make another order. Other creditors can appear and be substituted for you.
Presentation is what hurts, not the order
Creditors expect the pressure to arrive at the hearing. It arrives much earlier. Under section 127 of the Insolvency Act 1986, if a winding-up order is eventually made, any disposition of the company's property made *after presentation of the petition* is void unless the court validates it.
Banks know this. Once the petition is advertised, the company's bank will normally freeze the account rather than risk making void payments. A trading company that cannot pay wages, suppliers or rent is a company under genuine pressure, and this is where most petitions are settled. The company can apply for a validation order allowing specified payments to continue, but that is a separate application with its own cost and delay.
A petition is the right tool
- The debt is clear and undisputed
- The company is trading and has assets or income
- Statutory demand or judgment already unsatisfied
- The sum justifies the deposit and fees
- You are prepared for it to settle before the hearing
Use something else
- The company disputes the debt on genuine grounds
- There is a credible cross-claim
- The company is already insolvent with nothing to collect
- The debt is close to the £750 floor
- You need the money rather than the leverage
What it costs, and who is out of pocket
Two payments fall due at presentation: the court fee and the Official Receiver's deposit. You pay both, in advance, and the deposit is the larger of the two by a wide margin. Both are set by the state and revised periodically, so I check the current figures on GOV.UK before filing rather than quoting a number here that will be stale within the year.
The part worth understanding before you commit: the deposit funds the liquidation, and if there is nothing to collect you are unlikely to see it again. You are financing a process whose proceeds are distributed by statutory priority — secured creditors, then the costs of the liquidation, then preferential claims, then everyone else. Petitioning does not move you up that queue. Where the company has no assets, the honest advice is that the petition buys pressure and nothing else, and if the company cannot respond to pressure there is no point paying for it.
Before advising anyone to present, I check whether there is anything to collect. That check is quick and cheap, and it is the same first step as on any other enforcement route — see enforcing a judgment and the debt recovery page for the alternatives when the answer is no.
Do I need a statutory demand before a winding-up petition?
No. An unsatisfied statutory demand is one way to establish that a company cannot pay its debts under section 123, but it is not the only one. An unsatisfied execution on a judgment does the same. Where the debt is plainly owed, a statutory demand is still often worth serving because it is cheap and many companies pay within the 21 days.
What is the minimum debt for winding up a company?
£750. That is the statutory floor for a creditor's petition, not a sensible commercial threshold — the court fee and the Official Receiver's deposit together will normally exceed anything a debt near that figure can recover.
Why does the company's bank freeze the account?
Because of section 127. If a winding-up order is made, dispositions of company property after presentation of the petition are void unless the court validates them. Once the petition is advertised the bank will usually freeze the account rather than risk making payments that turn out to be void. The company can apply for a validation order to allow specified payments.
How long does a winding-up petition take?
Some weeks from presentation to the first hearing, though it varies with the court's list. Many petitions never reach a hearing because the debt is paid once the account is frozen. A contested petition, or one that is adjourned, takes considerably longer.
What happens if the company disputes the debt?
A winding-up petition is the wrong instrument, and an expensive one to get wrong. If the company shows a substantial dispute on genuine grounds or a credible cross-claim, the court will restrain or dismiss the petition and will normally order the creditor to pay costs, potentially on the indemnity basis. Issue a county court claim instead and establish the debt first.
Can a foreign creditor present a petition in England?
Yes. What matters is the company, not the creditor. If the debtor is a company registered in England and Wales, a Lithuanian or other overseas creditor can petition on the same basis as a domestic one. I am a solicitor of England and Wales and an advocate of the Lithuanian Bar, so both sides are handled in one matter.
Do I get my deposit back?
Only if there are funds to repay it. The deposit funds the Official Receiver's work in the liquidation, and where the company has no realisable assets the petitioning creditor commonly does not recover it. This is the main reason to check what the company owns before presenting rather than after.
This page states the law of England & Wales as at 28 August 2026. It is general information, not advice on your matter, and reading it does not create a solicitor-client relationship.