How does a winding-up order differ from a petition?

A winding-up petition is the initial request made by a creditor to the court to liquidate a company due to unpaid debts. If the court agrees and issues a winding-up order, the company is officially placed into compulsory liquidation. At that point, control of the company passes to the Official Receiver or an appointed liquidator. The key difference is that the petition is a threat, while the order is the court’s final decision that forces closure. Once an order is granted, the business must cease trading, its assets are gathered and sold, and directors may be investigated for misconduct. A petition can sometimes be stopped if directors act quickly by settling the debt, arranging a Company Voluntary Arrangement (CVA), or disputing the claim in court. However, once an order is made, directors lose control of the business entirely. Understanding this distinction is critical because directors have limited time to act once a petition is served.