How to find out if a company has a winding-up petition

What is a winding-up petition?

A winding-up petition is a creditor's application to the court to put a company into compulsory liquidation. Any creditor owed £750 or more on an undisputed debt can present one (HMRC is by far the most frequent petitioner). It is the most serious document that can exist against a trading company short of the winding-up order itself: if the court grants it, the company is liquidated and your invoices become unsecured claims.

How do I search for a petition?

• The Gazette (free). The petitioner must normally advertise the petition in the relevant Gazette edition no earlier than seven business days after serving it on the company, and at least seven business days before the hearing. Search the insolvency notices by company name or number.
• The central registry of winding-up petitions. For England and Wales, the Insolvency and Companies Court keeps a central index of pending petitions; you can ask the court for a search by telephone, and commercial search agents will run same-day checks for a fee. This catches the window (which can be weeks) between a petition being presented and its Gazette advert appearing.

A clear Gazette search is therefore not proof that no petition exists, only that none has been advertised yet. Banks run these checks continuously, which is why a company's account is typically frozen within hours of the advert appearing.

What happens after a petition is presented?

1. The petition is presented at court and served on the company.
2. It's advertised in The Gazette (this is when banks freeze the account).
3. The hearing follows, typically a couple of months after presentation.
4. The court makes a winding-up order, dismisses the petition (usually because the debt was paid), or adjourns.
5. On an order, the Official Receiver or a liquidator takes over the company.

One trap for suppliers: under section 127 of the Insolvency Act 1986, dispositions of the company's property made after the petition was presented are void if a winding-up order is later made. A payment you happily banked in that window can be clawed back by the liquidator. If a customer under petition offers to pay you, take advice before relying on the money.

What should I do if a customer has a petition against them?

1. Stop supplying on credit the same day. New supply should be cash in advance at most.
2. Take advice before accepting payment of old invoices (the section 127 trap above).
3. Assert retention of title and identify your goods now, while they're still on the premises.
4. Decide your position as a creditor: you can support the petition and appear at the hearing. Even if the petition is dismissed because the company paid it off, you've learned the company let a debt get to court; keep your own terms tight.

How do I hear about a petition in time?

Kestrel Alert checks The Gazette's insolvency notices for every company on your watch list daily and emails you the day a petition (or any other insolvency notice) is advertised, with a link to the official notice. The distress signals that usually precede a petition, overdue accounts and new charges among them, get flagged the same way, often months earlier. Your first company is free to watch.

This guide is general information, not legal advice. If a petition is in play on either side of your ledger, speak to a solicitor or insolvency practitioner immediately.