Liquidating a company is usually the last resort to recover money owed to you. Check how to issue a winding up petition and what forms you need to wind up a company that owes you money.
COMPULSORY LIQUIDATION: The term describes legal action taken against a company in court.
If a company is unable to pay its debts you can apply to the court to close the business (wind up the company).
But, to liquidate a company that owes you money:
There is a specific process to follow when you apply to wind up a company. You must use the correct forms and send them to the appropriate court.
This type of application to the court is better known as issuing a 'winding-up petition'. If the wind up petition is successful:
Note: The company owed you money before you took action to get it wound up. Thus, there is no guarantee that you will get all (or any) of the money owed to you.
There are other legal options if someone owes you money. You can also use a debt specialist. Their role is much like a solicitor and a specialist can often help you recover this type of debt.
The current fees to liquidate a company in court are:
In some cases, you can claim back the court fees if the company has enough funds to repay them.
There are several different methods of payment accepted for the fees. You can pay by cash, building society, bank, solicitor's cheque, or postal orders. Make any of these payable to 'HM Courts and Tribunals Service'.
Note: Different rules and winding up petition fees apply to wind up a company in Scotland.
The court needs to receive the correct form before they can deal with a winding up petition. It may be better to find a legal adviser to ensure you submit the right petition.
Download the form Comp 1 titled 'Winding-up petition' from HMCTS form finder website. Fill in form Comp 1 and then make three (3) copies. You will then need to:
The court needs evidence that the organisation owes you money (£750 or more). Thus, you will need to provide some proof using either:
Fill in form Comp 2 titled 'Verification of the petition' to complete the process. Form Comp 2 confirms the details of the petition.
The 'paid-up share capital' amount determines where you should send the petition. A winding up petition search on the Companies House register shows company paid-up share capitals.
You can submit the petition online if the company paid-up share capital is £120,000 or higher. Using HM Courts & Tribunals E-Filing Service means it gets sent to the High Court.
If the capital is under £120,000 you will need to search for your nearest court that deals with bankruptcy.
When you find it, you can submit the form petition online if it happens to be any of these:
Note: The petition will need submitting by postal methods if it was not one of these courts.
Following the application to the court you must then:
Use a 'process server' if you need help with this procedure. If you have a solicitor they can arrange this on your behalf.
What if you are unable to serve the winding up petition in person? In this case, you can deliver it by attaching it to the front door of the company or leave it at their office.
There may be a few extra tasks to complete the day after the petition gets served. Send a copy to the administrative receiver, relevant liquidator, administrator, or the supervisor if the company has involvement with:
The court will set a date for a hearing if they accept your winding-up petition of the company that owes you money.
Once you have a date for the court hearing you must 'formally' announce it. That means announcing where and where the hearing will take place.
The advert placed in The Gazette must state:
The court starts issuing a winding up order after the hearing - if the petition is successful. The court will then place an official receiver in charge of the liquidation process.
One role of the liquidator is to turn any company assets into money. Those funds can get used to pay off debts owed by the business. Other creditors can also register as a creditor in a bankruptcy to claim the money owed to them.
How to Wind Up a Company that Owes You Money in the United Kingdom