Statutory demand against a company
A statutory demand is a formal written demand for a debt of more than £750, and it is one of the clearest warning signs that a creditor is preparing to wind your company up. Once a statutory demand is served, the company usually has 21 days to pay the debt, reach agreement, or apply to have the demand set aside if the debt is genuinely disputed. If none of those happens, the creditor can present a winding-up petition, which is the serious court step that can freeze your bank account and force the company into compulsory liquidation. A statutory demand is therefore not something to file away and worry about later; it is a 21-day clock. The good news is that you still have real options at this stage, including paying, settling, disputing, or moving to a controlled procedure. The key is to take advice immediately, while the demand is still just a demand and not yet a petition. Insolvency Act 1986; gov.uk
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- What it is
- A formal demand for a debt over £750
- Your clock
- Usually 21 days to pay, agree or set it aside
- If ignored
- The creditor can present a winding-up petition
- Best response
- Take advice immediately, while it is still a demand
Treat it as a 21-day clock
A statutory demand is the step before a winding-up petition. If the debt is genuinely disputed you may apply to set the demand aside; if not, you need to pay, settle or take control through a formal procedure. Do not let the 21 days run out without advice.
The numbers behind this
See the live official figures on our winding-up petition tracker. Petition volumes show how often unpaid demands escalate to court. All figures come from named official sources on our UK business distress data hub.
Common questions
What happens after a statutory demand?
If the debt is not paid, settled or set aside within 21 days, the creditor can present a winding-up petition. That is the serious court step, so deal with the demand promptly.
Can I challenge a statutory demand?
Yes, if the debt is genuinely disputed on substantial grounds or you have a counterclaim. You can apply to set it aside. Take advice quickly because of the tight timescale.
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