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 it 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. Take advice immediately, while it is still just a demand. Insolvency Act 1986; gov.uk
- 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
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The winding-up petition timeline
Knowing where you are on it tells you how urgently to act.
- Statutory demand21 days to pay (debt over £750)
- Petition servedDay 0
- Advertised in The GazetteNo sooner than 7 business days after service
- Bank account frozenAt advertisement (s127 risk)
- Court hearingA few weeks after presentation
Indicative statutory timing; your exact dates depend on the court and creditor. Source: Insolvency Act 1986 s127; The Gazette.
Treat it as a 21-day clock
A statutory demand is the step before a winding-up petition, the serious court step that can freeze your bank account and force the company into compulsory liquidation, so it is not something to file away and worry about later. You still have real options at this stage. 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.
Counting the 21 days properly
The clock runs from service, not from the date printed on the demand, and service has rules: a demand on a company is normally served at its registered office. That matters because an incorrectly served demand is one of the grounds for challenging it. Within the period the realistic options are paying, agreeing terms in writing, or applying to set the demand aside where the debt is genuinely disputed on substantial grounds or where there is a real counterclaim. A dispute you have merely asserted is not the same as one you can evidence, and the courts distinguish sharply between the two. Doing nothing for three weeks converts a demand you could have challenged into a petition you must defend.
Related data
Our winding-up petition tracker: Recent winding-up petitions, which show how often unpaid debts reach court. Every page on our data hub names its official source.
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.