What is a winding-up petition?

A winding-up petition is a formal legal request made to the court by a creditor who is owed more than £750 and has not been paid. The petition seeks to force the debtor company into compulsory liquidation. Once filed, the petition is extremely serious. If advertised in the Gazette, it alerts banks, suppliers, and customers that the business may close, often resulting in bank accounts being frozen. Directors have only a short window to act, either by paying the debt, disputing the claim, or negotiating a settlement. If the petition proceeds and the court grants a winding-up order, the company’s assets will be liquidated and distributed among creditors. For directors, the petition represents a clear warning that immediate action is needed. Ignoring it almost always leads to compulsory liquidation and potential investigations into directors’ conduct by the Official Receiver.