What is a Statutory Demand?

Articles > What is a Statutory Demand?

A statutory demand is a legal procedure to force a creditor to pay amounts due. The power of the statutory demand is that you can follow it up 21 days later with a winding up petition. Statutory demands are a very effective way of forcing companies to pay a debt.

The requirements for a statutory demand are set out in the Insolvency Act and have to be followed carefully.

There is a fee of £150 and the debt must not be less than £750.

Most statutory demands are not issued for debts under £5,000 and in cases where you feel reasonably confident that your customer will be able to pay. If you doubt this, then you shouldn't bother with the process.

A statutory demand for a company is a relatively straight forward procedure and can be dealt with using the standard forms.