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 or reach agreement. A company cannot have a demand set aside the way an individual can: if the debt is genuinely disputed, its remedy is to apply to court, within 21 days, for an injunction stopping the creditor presenting a winding-up petition. Take advice immediately, while it is still just a demand. Insolvency (England and Wales) Rules 2016 r7.3; gov.uk
- What it is
- A formal demand for a debt over £750 (Insolvency Act 1986 s123)
- Your clock
- Usually 21 days to pay, agree or, if disputed, seek an injunction (gov.uk)
- 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.
Sources: the £750 debt and 21 days, Insolvency Act 1986 s123; advertisement no sooner than 7 business days after service, Insolvency Rules 2016 r7.10; payments after presentation void unless validated, s127.
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 the company can apply to court for an injunction to restrain the creditor from presenting a petition (a company cannot apply to set a demand aside; that procedure is for individuals); 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 may not support a petition. Within the period the realistic options are paying, agreeing terms in writing, or, where the debt is genuinely disputed on substantial grounds or there is a real counterclaim, applying for an injunction to restrain presentation of a petition, on form IAA, within 21 days of getting the demand (gov.uk; Insolvency (England and Wales) Rules 2016, r7.3). The separate procedure for setting a statutory demand aside (r10.4) applies to individuals, not companies; see our first 48 hours guide. 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.
Where to go from here
- If you decide to speak to a Licensed Insolvency Practitioner, choose your own: our practitioner directory lists every practitioner on the official Insolvency Service register, and how to choose an insolvency practitioner explains what to ask. Always confirm their entry on the official register before you instruct anyone.
Common questions
What happens after a statutory demand?
If the debt is not paid or settled within 21 days, and the court has not granted an injunction restraining a petition, 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 the company has a genuine counterclaim, but not by applying to set it aside: that procedure is for individuals. A company applies to court for an injunction to restrain the creditor from presenting a winding-up petition, on form IAA, within 21 days of getting the demand. Take advice quickly because of the tight timescale.