What to do when a limited company ignores a final demand

When a limited company ignores a final demand, you have already left ordinary reminders behind. The next steps differ from writing the demand itself: confirm the company is still the right debtor, move to a Practice Direction letter before action, assert Late Payment Act rights where they apply, then choose partner instruction or court — and pause if the debt is disputed or the company is insolvent.

Debt Collection UK (a trading style of PASECOM GROUP LTD) introduces B2B files to independent partner agencies. We are not solicitors, we are not authorised by the Financial Conduct Authority, and we do not collect consumer credit. PASECOM GROUP LTD was incorporated on 7 April 2026. We introduce commercial claims; we do not issue proceedings. Partners collect. Recovery is not guaranteed.

This guide sits after a final demand has gone unanswered. For drafting that letter, see how to write a final demand letter (B2B). For the broader company path, see how to recover unpaid invoices from a limited company.

Does the company still exist, and is it the right debtor?

Before you escalate, check the legal name and company number on Companies House, note the registered office, confirm you invoiced the limited company (or LLP) rather than a similarly named sole trader or affiliate, and look for striking-off, liquidation, administration, or a CVA.

If the wrong entity was billed, fix the paperwork before a letter before action. Directors are not automatically liable for the company’s trade invoices unless a personal guarantee or other personal liability sits alongside.

Have you re-checked your proof before you escalate?

Before the next letter, assemble the invoice and statement; purchase order or signed terms; delivery or performance evidence; prior reminders and the ignored final demand; and any written admission of the balance. That pack is what unpaid invoices recovery rests on.

How do you move from a final demand to a Practice Direction LBA?

A final demand is still credit control. The commercial next step against a limited company is a proportionate letter before action under Practice Direction – Pre-Action Conduct and Protocols: set out the claim clearly, enclose or list key documents, say what you want and by when, and allow a reasonable time to reply — typically 14 days in a straightforward case.

The Pre-Action Protocol for Debt Claims applies to claims against individuals, including sole traders. Do not send that sole-trader pack to a limited company. Company-versus-company debts follow the Practice Direction. More: letter before action for business debts and the money page letter before action.

Diarise the reply window. Silence after a proper LBA is a commercial signal to escalate, not a court order for payment.

Which Late Payment Act rights can you assert?

GOV.UK explains that you can claim interest and debt recovery costs if another business is late paying for goods or a service. On a qualifying commercial contract, the Late Payment of Commercial Debts (Interest) Act 1998 can add statutory interest and fixed compensation once payment is late.

Section 5A sets fixed compensation once statutory interest begins to run: £40, £70 or £100 per qualifying late payment, by debt band, with a further right to claim reasonable recovery costs not met by that sum. Interest is generally 8% above the relevant Bank of England base rate snapshot.

Adding interest and compensation strengthens a proportionate LBA. It does not compel payment, and it does not automatically pass every pound of a partner’s commission to the debtor. Confirm the Act applies before you assert figures.

Should you instruct a partner or issue a court claim?

After an ignored final demand and a proper Practice Direction LBA with no genuine dispute:

1. 1. Partner instruction — introduce the file for pre-legal commercial chase. The fee is 15% of what is recovered, payable only when you have been paid. Marketing on this site describes 15% only when the client is paid. The fee is 15% of what is recovered, payable only when you have been paid. Recovery is not guaranteed. See business debt collection and debt collection agency.
2. 2. County court claim — you decide whether to issue. GOV.UK explains how to claim money owed. Issuing is not payment. Court fees and solicitor costs are separate from a partner’s contingent commission. We do not issue proceedings.

Partners can chase professionally; they cannot pretend to be High Court Enforcement Officers, invent FCA authorisation, or guarantee recovery.

When should you pause if the debt is disputed or the company insolvent?

Pre-legal collection is for undisputed commercial debt. Pause and take advice where the company raises a genuine issue of substance in writing; you billed the wrong entity; or Companies House shows a formal insolvency process that changes how creditors must claim.

A late, undocumented excuse after months of silence is not a new payment term. Document the dispute, reply in writing, and only instruct on the clean balance you can still prove. Related: what to do when a business ignores your invoice.

What is a calm sequence after an ignored final demand?

1. 1. Re-confirm company name, number, status, and registered office.
2. 2. Tighten the evidence pack and keep a record of the ignored final demand.
3. 3. Send a Practice Direction letter before action; diarise about 14 days.
4. 4. Include Late Payment Act interest and compensation where the contract qualifies.
5. 5. If still unpaid and not genuinely disputed, instruct a partner on fixed-percentage terms, or decide whether to issue a claim yourself.
6. 6. Stop escalation if insolvency or a real dispute appears.

Frequently asked questions

What should I do when a limited company ignores a final demand? Confirm the legal entity and that it is still trading, send a Practice Direction letter before action with your evidence, claim Late Payment Act rights where they apply, then instruct a collection partner or consider a court claim if the debt remains undisputed.

Is a final demand the same as a letter before action? No. A final demand is usually the last credit-control chase. An LBA under the Practice Direction is a formal pre-action step that sets out the claim, documents, and a clear deadline before court is contemplated.

How long should I wait after the LBA? Practice Direction guidance points to a reasonable time — typically 14 days for a straightforward debt. Diarise it. Do not treat silence as automatic payment.

Can I chase the director personally because the company ignored me? Usually no. The company is the debtor unless you hold a personal guarantee or another basis for personal liability. Check the paperwork before writing to an individual.

Does recovery cost nothing after a final demand is ignored? No. The fee is 15% of what is recovered, payable only when you have been paid. Recovery is not guaranteed.

Can Debt Collection UK sue the limited company for me? No. We introduce B2B files to independent partner agencies. We are not solicitors and we do not conduct litigation. You remain the creditor if court action is needed.

When a final demand has failed on an undisputed limited-company balance, upload the invoice and terms rather than another polite reminder. The fee is 15% of what is recovered, payable only when you have been paid. Recovery is not guaranteed.