The Shulchan Aruch Mentions the Recital of Vayechulu In Three Different Places

Halachah lema’aseh [practically], the din of saying “Vayechulu” is brought down three times:

1. The Shulchan Aruch (268:1) rules that one should recite “Vayechulu” during Ma’ariv.
2. The Shulchan Aruch (268:7) writes: We recite “Vayechulu” after the silent shemonah esrei, because of Yom Tov that falls on Shabbos when we don’t mention it in the quiet shemonah esrei. Additionally, it is recited for those who don’t know how to say it by themselves. This time it is recited: בקול רם ומעומד – “out loud, and in unison with the rest of the congregation.” The Mishnah Berurah (s.k. 19) explains: It is said whilst standing as we are testifying that Hashem created the world, and the din is that witnesses are supposed to stand like it says (Devorim 19:17): ועמדו שני האנשים - “The two men should stand”.
3. In Hilchos Kiddush, the Shulchan Aruch (271:10) writes: “’Vayechulu’ is recited whilst standing, then the berachah of hagofen, and then kiddush is recited.” The Rema writes: “The custom is to sit when saying ‘Vayechulu’”. The Mishnah Berurah (s.k. 46) explains: By sitting down, one fulfils the requirement of kiddush bemakom seudah [making kiddush in the same sitting as the eating a meal] much better. Or, since one person is being moitzi other people, there needs to be a kevias [fixed setting] and sitting down makes much more of a kevias.

However, the first few words of kiddush should be said whilst standing out of honour for Hashem’s name. Kiddush starts with the words: יום ה ששי ויכולו ה שמים, which have the roshei teives of Hashem’s name. Practically, the Mishnah Berurah (268:19) quotes the Pri Megodim who says that the minhag is to recite the entire “Vayechulu” standing.