Navigating the Maze of Winding-Up Petition Service: A Vital Guide

In a world where business dynamics are ever-evolving, the legal intricacies surrounding winding-up petitions play a crucial role in the realm of corporate governance. Earlier this year the Companies Court in Leeds witnessed a surge in complications related to the service of winding-up petitions.

To address these concerns and shed light on the intricacies of winding-up petition service all petitioners, Counsel and Legal Practitioners were issued an explanatory notice by District Judge Bond. This served (excuse the pun) as a useful reminder into the specifics of serving winding up petitions in relation to the Insolvency Rules 2016 that the court has highlighted, and we will summarise here.

Service by Handing to a Prescribed Individual

One of the fundamental aspects of serving a winding-up petition is to deliver it to the company’s registered office to a specified individual as per the Insolvency (England and Wales) Rules 2016. This individual can be one of the following:

1. At the time of service, they acknowledge being a director, other officer or employee of the company;

2. They are, to the best of the knowledge and belief of the person serving the petition, a director, other officer or employee of the company; or

3. They acknowledge being authorised to accept service of documents on the company’s behalf.

Service by Depositing at the Registered Office

If and only if the company’s registered office lacks any of the aforementioned individuals, then the Insolvency Rules 2016 rules allow for an alternative approach. The petition can be served by depositing it “at or about the registered office in such a way that it is likely to come to the notice of a person attending the office.”

With this in mind, there’s a crucial distinction to be made between good service of depositing and otherwise.

Physically handing the petition to a person who doesn’t fall under the categories above, such as a receptionist in a multi occupancy building, who is not employed by the company, and having them forward the documents on does not qualify as good service by depositing.

However, using the same example above, if one were to leave the petition on the reception desk of the registered office in the presence of the receptionist in such a way that ensures it will likely come to the notice of someone attending the office then this would be considered as good service.

Multi-Occupancy Building Caution

In cases involving multi-occupancy buildings, it’s crucial to pinpoint the precise registered office of the company. If the entire building serves as the registered office, leaving the petition on the main reception desk, if likely to be noticed by someone, is acceptable. However, if the registered office is a specific unit within the building, the petition must be deposited near that specific unit. In this instance, leaving it on the main reception desk of the building will often not suffice.

When Access is Limited

When access to the interior of the registered office is impossible, posting through the letterbox is considered good service. If there’s no letterbox and all other options have been exhausted, it could be time to get creative and securely affix the petition to an external door, shutter, or similar location in a waterproof envelope. This would be deemed as an acceptable alternative.

However, simply pushing the petition under a door or shutter is not deemed good service, as it could be easily concealed and go unnoticed. A glass door through which the petition can be clearly seen by the process server would likely meet the service requirements.

Evidence of Non-Occupancy

In situations where evidence suggests that the company doesn’t occupy the registered office or has ever been based there, good service can still be effected if it complies with Insolvency Rules 2016 rules. Nonetheless, if it appears that the petition is unlikely to come to the company’s attention, the court, in its discretion, will demand that the petitioner takes reasonable steps to ensure notice.

Reasonable steps include:

1. Leaving the petition at a trading address or other place of business in England and Wales for the company in such a way as to be noticed by a person attending there.

2. Serving the secretary or a director, manager, or principal officer of the company wherever they can be found.

3. Demonstrating efforts to locate a trading address or place of business in England and Wates and the relevant individuals, even if those efforts are unsuccessful.

These steps may involve basic searches, telephone calls, or email inquiries, but petitioners are not typically expected to conduct exhaustive investigations or employ tracing agents.

Registered Office vs. Trading Address

Often, a company’s registered office isn’t where it conducts its day-to-day operations but serves as an address for registered office services, mail forwarding, or accounting purposes. As it’s presumed that the company has established mechanisms to receive documents at that address, as long as the petition is served in accordance with Insolvency Rules 2016, additional steps to notify the company are unlikely to be required.

When Service at the Registered Office Isn’t Feasible

There are instances when serving the petition at the registered office isn’t achievable perhaps due to the registered office building being demolished or if the building doesn’t exist. In such cases alternative options include:

1. Leaving the petition at the last known place of business in England and Wales, in such a way as to be noticed by a person attending there or

2. Serving the secretary or a director, manager, or principal officer of the company wherever they can be found.

Certificate of Service

The Insolvency Rules 2016 specify the required contents of a certificate of service.

It serves as a reminder that in cases where the petition relies on depositing it a registered office due to the absence of an identified appropriate person in situ, then the certificate must expressly confirm the absence of a director, officer, or employee of the company or any other authorised person at the registered office during service. This confirmation is vital because it is only in the absence of such individuals that depositing it a registered office can be invoked.

Not only that, but there also needs to be precise detail on how the deposit was made to satisfy the court. For example, it’s vital to expressly note:

1. If access to the registered office wasn’t possible.

2. Where the petition is left in a letterbox of a multi occupancy building, whether the letterbox is private, known only to the company, or communal.

3. Why serving via a letterbox would ensure that the petition will get noticed by someone at the registered office.

4. A full description of the petition’s affix, where, the petition may have been affixed to the door in a waterproof envelope, and an explanation as to why this method was resorted to.

In short, the court wants to know the full detail, and the certificate of service must reveal all.

In conclusion, navigating the complexities of winding-up petition service demands meticulous attention to detail and adherence to the specific rules outlined in the Insolvency (England and Wales) Rules 2016. Whether you’re serving a petition, representing a company, or presiding over a case, understanding these rules is paramount to ensuring due process and justice in the corporate legal landscape.

Here at Tremark we found Judge Bond’s notice of clarification on what constitutes as good service for winding up petitions a helpful reminder and allowed us to review our own processes to ensure successful serves for all of our clients. To find out more about how we can assist you on process serving of any kind, get in touch with one of our friendly team on 0113 263 6466 or at info@tremark.co.uk