Winding-Up Petition

A petition to the court to compulsorily liquidate a company. A creditor may petition if the company owes more than the prescribed minimum (£750 under s.123(1)(a) IA 1986; temporary increases have applied) and appears unable to pay its debts. This is the corporate equivalent of bankruptcy.

In practice

The creditor typically serves a statutory demand on the company's registered office. If the company does not pay within 21 days, the creditor presents a winding-up petition. The petition is advertised in The Gazette, which usually causes the company's bank to freeze its accounts. This commercial pressure makes it a highly effective enforcement method against trading companies.