You can apply to the court to close or ‘wind up’ a company if it can’t pay its debts. This is also known as compulsory liquidation.
To wind up a company you must:
- be owed £750 or more
- be able to prove that the company can’t pay you
To apply, you’ll have to fill in the forms and give them to the court.
Your application to the court is known as a ‘winding-up petition’. If you’re successful:
- the company assets are sold
- any legal disputes are settled
- the company collects money it’s owed
- funds are paid to you and any other creditors
You might not get all or any of the money you’re owed.
The fees are:
- £280 – court fees
- £1,600 – petition deposit (to manage the ‘winding-up’)
You might be able to get the fees back if the company can afford to repay them.
You can pay using cash, postal orders or a building society, bank or solicitor’s cheque made payable to ‘HM Courts and Tribunals Service’.
There are different rules on winding up a company in Scotland.
You must send the right forms to the court before they can deal with your petition. You might want to get legal help to make sure you submit your petition correctly.
Fill in form 4.2 and make 3 copies.
You’ll need to:
- make sure the company’s details are correct
- state if any European Community regulations apply (this applies if the company is registered in or does business in England and Wales)
- ask the court to restore the company (if it’s been dissolved) before winding up the company
You need to provide evidence the company owes you money, for example:
- a statutory demand – include the amount and date the demand was served
- a court judgment – include the amount awarded (and your costs and interest), the date of the judgment, the court name and case number
You’ll also need to provide a statement of truth confirming the details of your petition. Read guidance about what to write in your statement.
Where to send the petition
If the Companies House register shows that company has a ‘paid up share capital’ of more than £120,000, send the petition to the High Court.
The High Court
7 Rolls Buildings
If the company’s ‘paid up share capital’ is less than £120,000, use the court finder to find a court dealing with insolvency. You must use the court nearest to the company’s registered office.
Find the address of the registered office on the Companies House register.
After you apply
- deliver (‘serve’) a copy of the petition to a company director or employee
- provide a certificate of service to the court confirming that the petition has been served on the company
You can get a ‘process server’ to help you – your solicitor can arrange this.
You can serve the petition by attaching it to the company’s front door or leaving it at the office if you can’t serve it in person.
The day after you serve the petition, send a copy to the relevant liquidator, administrative receiver, administrator or supervisor if the company is involved in:
- voluntary liquidation
- administrative receivership
- an administration order
- a voluntary arrangement
The court hearing
If the court accepts your petition, they’ll arrange a date for a hearing.
Announce the hearing
When you’re given a date for the hearing, you must formally announce when and where it will take place.
- Use form 4.6 to place an advert in The Gazette at least 7 working days before the hearing saying the petition has been served.
- Send a copy of the advertisement and a certificate of compliance to the court at least 5 working days before the hearing.
- Give a list of everyone who will be attending to the court by 4:30pm on the day before the hearing.
After the hearing
If the petition is successful, the court will issue a winding-up order.
The court will put an official receiver in charge of the liquidation. They’ll start the process of turning the company’s assets into money that can be used to pay the company’s debts.
Other creditors can register to claim the money they’re owed.
Last updated: 25 October 2016