Knowledge Hub
for Growth

Understanding Validation Orders

Validation orders are court orders that enable businesses to conduct transactions when they’re subject to a winding-up petition by a creditor. Winding-up petitions severely limit the business’s ability to trade normally as they’re advertised publicly in the Gazette and alert creditors and other interested parties to the company’s financial position.

This article will explain how validation orders work, how to apply for a validation order and what evidence you need as part of your application.

The article has been co-produced with Karl Hodson, an expert on validation orders at UK Business Finance. Karl is responsible for helping businesses across the UK raise funding for a variety of purposes such as working capital, expansion and capital equipment. He has specialist knowledge of raising finance through invoice and asset-based lending, crowdfunding, loan and equity funds and Government schemes.

How do validation orders work?

A validation order works by allowing a transaction, which might otherwise be void, to go through the bank account of a company subject to a winding up petition. Common examples of court validated transactions include wages and supplier payments, but property and other assets may also be disposed of via a validation order if the court decides the transaction won’t be detrimental to creditors as a whole.

Some validation orders are date specific and allow a business to trade normally for a certain time whilst others sanction unrestricted trading while the future of the business is ascertained.

How to apply for a validation order

You can apply a for validation order using application form 1AA, but creditors with an interest in a transaction may also apply. The application form is sent to the court handling the winding-up petition and must be accompanied by a detailed witness statement and payment of £155.

Once the court receives your application a hearing date is arranged where you can put your case in more detail and answer any questions. It’s important to present a clear and compelling case to the court and demonstrate the company’s ability to pay its debts.

Evidence to include with your application

The court will need to see solid evidence that granting the validation order will benefit creditors - transactions detrimental to creditors won’t be permitted as their interests must be prioritised in this situation.

Details in a witness statement will typically include:

  • Reasons why the winding-up petition has been filed
  • Financial information, including levels of assets and liabilities
  • Whether the debt is disputed or accepted
  • The transaction(s) for validation by the court
  • If a property transaction is required, full details of the property and a professional valuation from an independent source
  • Cash flow and profit and loss projections for the proposed validation order period
  • Reasons why the transactions need to be validated

What happens after the validation order hearing?

A validation order hearing generally takes place within a few days and there are three potential outcomes:

The validation order is granted

If the order is granted by the court you’ll need to send a copy of it to your bank. They should remove the ‘freeze’ on your account straight away so the transactions stated in the validation order can be made.

More evidence is needed to support your application

In some cases, the court will require more evidence to be presented before they can make a decision on whether to grant a validation order. In this case you’ll have to gather the information they need and attend another hearing.

Your application is refused

If the court believes that allowing a transaction to go through would be detrimental to your creditors your application is likely to be refused and you may be forced into liquidation, which means your company closes down permanently.


Validation orders allow companies under threat of winding up to carry on in business to some degree and to potentially reach agreement with their creditors via formal negotiations. It’s vital to act quickly in this situation as presenting a winding-up petition is a serious step for any creditor to take.

What next?

Please leave us your details and we’ll contact you to discuss your situation and legal requirements. There’s no charge for your initial consultation, and no-obligation to instruct us. We aim to respond to all messages received within 24 hours.

Your data will only be used by Harper James Solicitors. We will never sell your data and promise to keep it secure. You can find further information in our Privacy Policy.

Our offices

A national law firm

A national law firm

Our commercial lawyers are based in or close to major cities across the UK, providing expert legal advice to clients both locally and nationally.

We mainly work remotely, so we can work with you wherever you are. But we can arrange face-to-face meeting at our offices or a location of your choosing.

Head Office

Floor 5, Cavendish House, 39-41 Waterloo Street, Birmingham, B2 5PP
Regional Spaces

Stirling House, Cambridge Innovation Park, Denny End Road, Waterbeach, Cambridge, CB25 9QE
13th Floor, Piccadilly Plaza, Manchester, M1 4BT
10 Fitzroy Square, London, W1T 5HP
Harwell Innovation Centre, 173 Curie Avenue, Harwell, Oxfordshire, OX11 0QG
1st Floor, Dearing House, 1 Young St, Sheffield, S1 4UP
White Building Studios, 1-4 Cumberland Place, Southampton, SO15 2NP
A national law firm

Like what you’re reading?

Get new articles delivered to your inbox

Join 8,153 entrepreneurs reading our latest news, guides and insights.


To access legal support from just £145 per hour arrange your no-obligation initial consultation to discuss your business requirements.

Make an enquiry