Sheriff Court and Court
of Session Liquidations
If a creditor is trying to force your Scottish company into liquidation, the proceedings will be dealt with through the Scottish courts.
You may receive papers from a local Sheriff Court or from the Court of Session in Edinburgh.
That can make the situation look more complicated than it needs to be.
The important things to establish are:
- Which court is dealing with the petition?
- Who has presented it?
- What debt is relied upon?
- When was the petition presented?
- What deadline is shown in the court papers?
- Has a provisional liquidator already been appointed?
A winding-up petition is not the same as a winding-up order. If the court has not yet ordered the company into liquidation, there may still be options — but court deadlines need to be taken seriously.
Which courts can wind up a Scottish company?
The Court of Session has jurisdiction to wind up any company registered in Scotland.
A Sheriff Court can also have jurisdiction in many cases.
Under the Insolvency Act 1986, where the company’s paid-up share capital does not exceed £120,000, the Sheriff Court for the sheriffdom in which the company’s registered office is situated has concurrent jurisdiction with the Court of Session.
For most ordinary owner-managed companies, paid-up share capital is far below £120,000, so Sheriff Court jurisdiction will often be available.
Importantly, that £120,000 figure refers to paid-up share capital. It is not the company’s turnover, assets or amount of debt.
What is the Court of Session?
The Court of Session is Scotland’s supreme civil court.
Among its many functions, it has jurisdiction to deal with corporate insolvency proceedings, including petitions to wind up Scottish registered companies.
You may therefore see a winding-up petition headed:
COURT OF SESSION
rather than the name of a local Sheriff Court.
That does not automatically mean the case involves a particularly large debt or unusually serious allegation. It means the petition has been brought in a court that has statutory jurisdiction to deal with the winding up.
What is a Sheriff Court?
Scotland has Sheriff Courts throughout the country dealing with a wide range of civil and criminal matters.
They also have jurisdiction over many Scottish company winding-up proceedings.
For insolvency purposes, the relevant Sheriff Court is linked to the company’s registered office and the statutory jurisdiction rules.
So a Glasgow-based Scottish company may find its winding-up proceedings dealt with through the appropriate Sheriff Court rather than the Court of Session in Edinburgh.
The fact that proceedings are in a Sheriff Court does not make a winding-up petition any less serious.
Can the case move from one Scottish court to another?
Potentially, yes.
The Insolvency Act gives the Court of Session powers in appropriate circumstances to remit winding-up proceedings:
- From the Court of Session to a Sheriff Court
- From a Sheriff Court to the Court of Session
- From one Sheriff Court to another
This is another reason not to assume that the court named in an old letter will necessarily tell you everything about the current stage of the case.
If you have received court papers, work from the latest order or correspondence.
What is a winding-up petition?
A winding-up petition is an application asking the court to order the company into compulsory liquidation.
It may be presented by a creditor such as:
- HMRC
- A supplier
- A landlord
- A lender
- Another party owed money by the company
The petition will explain who is asking for the company to be wound up and the legal basis relied upon.
Presentation of the petition does not itself liquidate the company.
The court must still decide what order should be made.
What happens after a petition is presented?
The court gives directions about how the petition is to be served, publicised and progressed.
For a Court of Session winding-up petition, the current rules normally require:
- Service of the petition on the company where the creditor is the petitioner
- Publication in the Edinburgh Gazette
- Publication in any newspaper additionally directed by the court
- A period in which interested parties can lodge formal answers to the petition
Under the standard Court of Session rule, the period for lodging answers is eight days, unless the court shortens or extends it.
If your papers specify a particular deadline, however, use the deadline in your actual court papers rather than relying on a general guide.
What are “answers”?
In Scottish court terminology, answers are the formal response lodged by somebody who intends to oppose or otherwise participate in the petition.
They are not simply an email to the creditor explaining that you disagree.
If the company needs to oppose a petition — for example because the debt is genuinely disputed — Scottish legal advice should be obtained urgently about the appropriate court response.
Do not allow the deadline to expire while trying to negotiate informally with the creditor.
Negotiations and the court process are not the same thing.
What is an interlocutor?
If you receive Scottish court documents, you may also see the word interlocutor.
An interlocutor is simply a formal written order of the Scottish court.
For example, an interlocutor might:
- Direct service and advertisement of the petition
- Appoint a provisional liquidator
- Continue a hearing to another date
- Make the winding-up order
- Appoint an insolvency office-holder
The terminology sounds technical, but the important thing is to read what the order actually requires and note any deadline.
Does the petition become public?
Yes, once it reaches the advertisement stage.
Unless the court directs otherwise, a Scottish winding-up petition is advertised in the Edinburgh Gazette.
That can alert:
- The company’s bank
- Other creditors
- Suppliers
- Customers
- Lenders
- Credit-reference providers
This is one reason a winding-up petition can have an immediate commercial effect even before the court decides whether to liquidate the company.
Do I have to attend the court hearing?
Do not assume that the director personally attending court is either always required or enough to protect the company’s position.
If the company wishes to oppose a winding-up petition, seek advice from a Scottish solicitor experienced in insolvency litigation about:
- Whether formal answers need to be lodged
- What evidence is required
- Who should represent the company
- What should happen at the hearing
Turning up at court on the hearing date and explaining informally that the company needs more time is not a substitute for dealing properly with the proceedings.
What can the court do with a winding-up petition?
The court does not automatically grant every petition simply because it has been presented.
Depending on the circumstances, the proceedings may result in the court:
- Making a winding-up order
- Refusing or dismissing the petition
- Continuing or adjourning the proceedings
- Making an interim order
- Dealing with other applications arising in the proceedings
The correct response therefore depends on why the petition has been presented and whether the company has a genuine answer to it.
What if the company disputes the debt?
A winding-up petition is not intended to be a substitute for ordinary debt litigation where there is a genuine and substantial dispute about whether the debt is due.
But saying “we dispute it” is not enough on its own.
Useful evidence may include:
- Contracts
- Invoices
- Credit notes
- Emails
- Evidence of defective work or goods
- Previous correspondence disputing the liability
- Evidence of payment
If the debt is genuinely disputed and a petition has already been presented, obtain Scottish legal advice quickly rather than relying on ongoing correspondence with the creditor.
What if the company agrees it owes the money?
Then the question becomes whether the debt can realistically be dealt with before the court makes a winding-up order.
Possible options might include:
- Payment
- A settlement acceptable to the creditor
- Refinancing
- A wider restructuring
- A CVA
- Administration in an appropriate case
- A planned voluntary liquidation if the company cannot be rescued
But paying the original petitioner is not always the end of the matter once the petition has become public.
Another creditor entitled to petition may, in appropriate circumstances, ask to take the original petitioner’s place and continue the proceedings.
So before using all available cash to pay one creditor, look at the company’s whole financial position.
Can the court appoint a provisional liquidator before deciding the petition?
Yes.
After a winding-up petition has been presented, the court can appoint a provisional liquidator where the circumstances justify it.
This is an interim protective step before the court has finally decided whether to wind the company up.
The court’s order specifies what functions the provisional liquidator is authorised to perform.
If a provisional liquidator has been appointed, the directors should not assume that they remain free to deal with company money and assets in the usual way.
That requires immediate professional advice.
What happens if the court makes the winding-up order?
The company then enters compulsory liquidation.
For a Scottish company, an interim liquidator is appointed.
The directors cease to control the company’s business and assets in the ordinary way and must co-operate with the insolvency process.
The interim liquidator begins dealing with matters including:
- Securing company property
- Obtaining books and records
- Investigating the company’s affairs
- Establishing assets and liabilities
- Dealing with creditors
- Progressing appointment of the liquidator who will administer the winding up
Is there an Official Receiver at the Scottish court?
No.
This is an important difference from compulsory liquidation in England and Wales.
When the Scottish court makes the winding-up order, the initial insolvency appointment is an interim liquidator.
If you have read online that “the Official Receiver takes over at the hearing”, that guidance is likely to be describing an English or Welsh company rather than the Scottish process.
Can a director petition to wind up their own Scottish company?
There are circumstances in which the company or its directors can ask the court to wind the company up.
That is different from a normal Creditors’ Voluntary Liquidation, where the shareholders pass the winding-up resolution and the voluntary liquidation procedure is followed without needing a court winding-up order.
A director-led court petition may be appropriate in particular circumstances, but it should not be assumed to be the normal or cheapest way to close an insolvent company.
If the company can use the ordinary Scottish CVL procedure, we would normally compare the practical advantages, costs and timing before recommending a court petition.
Can a CVL still be considered after court proceedings start?
Potentially, before the court has made the winding-up order.
But once a petition exists, the voluntary liquidation cannot be considered in isolation.
The adviser needs to know:
- Which court has the petition
- When it was presented
- Whether it has been advertised
- Whether answers have been lodged
- Whether another creditor has become involved
- Whether a provisional liquidator has been appointed
- When the next court hearing is due
Once the winding-up order has actually been made, however, the company is already in compulsory liquidation.
Can administration still be used if there is a winding-up petition?
Potentially, but an existing petition affects the procedure and can require court involvement.
If administration could preserve a valuable trading business, jobs, contracts or assets, the option should be considered urgently rather than after the winding-up hearing.
The key question is whether administration can achieve a better insolvency outcome than allowing the company simply to be wound up.
Do I need a Scottish solicitor as well as an insolvency practitioner?
Not every financially distressed company needs court representation.
But once a winding-up petition has been presented, a Scottish solicitor experienced in insolvency litigation may be needed alongside the insolvency practitioner.
The roles are different.
The insolvency practitioner can help assess:
- Whether the business is viable
- Whether rescue is realistic
- Whether CVL, CVA or administration should be considered
- The company’s assets and creditor position
- The consequences for directors and employees
The solicitor can deal with:
- Responding formally to the petition
- Lodging answers where appropriate
- Court hearings
- Applications or orders required from the court
- Legal disputes about the petition debt
Where both are needed, the important thing is that they work together rather than treating the court case and the company’s insolvency as two unrelated problems.
What should I do if I’ve just received Scottish winding-up papers?
- Do not ignore them.
- Check which court is named. Sheriff Court or Court of Session?
- Record the date the petition was presented.
- Find the response deadline.
- Identify the petitioner and the amount claimed.
- Decide whether the debt is admitted or genuinely disputed.
- Check whether the petition has already been advertised.
- Tell your adviser if the bank account has been restricted.
- Do not transfer assets or make unusual payments.
- Take insolvency and Scottish legal advice before the deadline expires.
You do not need to understand every Scottish court expression before asking for help.
Send us the papers. We can start by identifying what stage has actually been reached.
Sheriff Court and
Court of Session FAQs
Can both the Sheriff Court and Court of Session wind up a Scottish company?
The Court of Session can wind up any company registered in Scotland. A Sheriff Court also has concurrent jurisdiction where the statutory requirements are satisfied, including the rules relating to the company’s paid-up share capital and registered office.
What is the £120,000 Sheriff Court limit?
It relates to the company’s paid-up or credited-as-paid-up share capital. It is not a limit on turnover, company debts or asset value.
What are answers to a winding-up petition?
Answers are the formal Scottish court response lodged by a party intending to oppose or otherwise participate in the petition. If the company intends to challenge a petition, obtain Scottish legal advice about the required procedure.
What does interlocutor mean?
An interlocutor is a formal written order of the Scottish court.
How long do I have to respond?
Use the deadline in the actual court papers. For Court of Session winding-up petitions, the standard Chapter 74 period for lodging answers is eight days unless the court shortens or extends it.
Does a petition mean the company is already liquidated?
No. The company enters compulsory liquidation if the court subsequently makes a winding-up order.
Can a provisional liquidator be appointed first?
Yes. The court can appoint a provisional liquidator after presentation of the petition where appropriate and specifies the functions the provisional liquidator can perform.
What happens if the winding-up order is made?
The company enters compulsory liquidation and an interim liquidator is appointed under the Scottish procedure.
Received winding-up papers from a Scottish court?
Do not spend the response period trying to work out Scottish court terminology on your own.
Tell us which court is dealing with the petition, who the creditor is and what deadline appears on the papers.
We can help assess the company’s financial position and establish whether rescue, settlement or voluntary liquidation remains realistic.
Where a formal court response is required, we can work alongside the appropriate Scottish legal adviser.
If there is a court deadline, lead with that when you contact us.