Short answer: A statutory demand is a formal insolvency demand a creditor can serve on a UK company that owes an undisputed commercial debt of more than £750. The company usually has 21 days to pay, secure or compound the debt. It is not required before every winding-up petition, and it is a poor fit for disputed invoices. Debt Collection UK introduces B2B claims to a partner agency; we are not solicitors and we do not serve statutory demands ourselves.
The fee is 15% of what is recovered, payable only when you have been paid. Recovery is not guaranteed.
If a UK Ltd, LLP or PLC still owes you for goods or services after reminders, you will hear about letters before action, county court claims and statutory demands. They are different tools. A letter before action is the usual pre-court warning. A county court claim asks the court to decide a money claim. A statutory demand sits under insolvency law: it is a prescribed written demand that, if ignored on a qualifying debt, can support a winding-up petition.
This page is for creditors chasing an unpaid commercial invoice. It is general information for England and Wales, not legal advice. Sources checked on 4 November 2026 include Insolvency Act 1986 section 123, Insolvency (England and Wales) Rules 2016 rule 7.3, GOV.UK statutory demands guidance, how to serve a statutory demand, the Insolvency Service director hub on statutory demands, and Form SD1.
When a statutory demand fits
A company statutory demand is typically considered only when all of the following are true:
- The debtor is a limited company, LLP or PLC (not a consumer and not a sole trader on this site).
- The debt is a liquidated sum then due — usually a clear unpaid invoice balance — exceeding £750.
- The debt is undisputed, or any dispute is not genuine and substantial.
- You are prepared for the next step to be insolvency pressure, including the cost and publicity risk of a petition if the demand is ignored.
- You have already tried proportionate credit control: statement, final demand and, in most cases, a letter before action.
If those points are not met, start with business debt collection via a partner, or with an LBA and, if needed, a money claim. See also our guides on how and when to use a statutory demand for B2B debt and statutory demand vs letter before action.
The £750 threshold and the 21-day period
Under section 123(1)(a), a company is deemed unable to pay its debts if a creditor owed a sum exceeding £750 then due has served a written demand in the prescribed form at the company's registered office, and the company has for three weeks neglected to pay, secure or compound that sum to the creditor's reasonable satisfaction. Three weeks is treated in practice and in the Rules as 21 days from service.
Rule 7.3 sets out what the demand must contain: company identification and registered office, creditor details, the amount and how the debt arises, a 21-day payment statement, a named contact for securing or compounding the debt, and a statement that the company may apply for an injunction restraining presentation or advertisement of a petition. HMCTS publishes Form SD1 for demanding immediate payment from a limited company.
GOV.UK service guidance expects personal service where possible — leaving the demand at the registered office or giving it to an officer — with records of when and how it was served. Registered post or letterbox delivery is only for cases where personal delivery cannot be achieved. Keep a complete copy and proof of service; you will need them if the demand is ignored.
Risks if the debt is disputed
Insolvency process is not a short-cut through a liability fight. If the company has a genuine and substantial dispute, or a serious cross-claim that extinguishes the debt, using a statutory demand can backfire. The company may apply for an injunction to stop you presenting or advertising a petition. You can face costs. GOV.UK's director hub notes that a company cannot challenge a statutory demand in the same way an individual applies to set one aside, but it can apply to restrain a winding-up petition, and rule 7.3 requires the demand to warn of that right.
Practical rule: if the customer has particularised a set-off, quality dispute or contract defence, pause the insolvency route. Clarify the file, send a focused LBA, or issue a money claim where the court can decide the dispute. Partner collection is for undisputed B2B balances against solvent Ltd, LLP or PLC debtors.
Not required before every winding-up petition
A statutory demand is one route under section 123. It is not the only one. The same section also covers unsatisfied execution and proof to the court that the company is unable to pay its debts as they fall due, among other grounds. You do not have to serve a demand before every petition. Equally, serving a demand does not force you to petition; GOV.UK notes a limited window (commonly described as four months) to apply to wind up after an ignored demand, with an explanation required if you are late.
Winding-up is a serious, public and costly step. See our winding-up petition creditor guide for when a petition is realistic, GOV.UK fees, and why partner collection usually comes first. If the company is already in a formal insolvency process, ordinary chasing changes — see customer in administration or liquidation and enforcing a CCJ against a limited company.
Practical ladder for an unpaid company invoice
- Internal chase. Reminder, statement and a clear final demand with a pay-by date.
- Letter before action. A concise LBA that follows pre-action expectations, usually giving a company about 14 days to pay or respond — see letter before action.
- Partner demand or county court. Many clear invoices settle after a partner demand. Alternatively issue a county court claim for a money judgment.
- Statutory demand. Reserved for an undisputed company debt above £750 where insolvency pressure is a considered next step.
- Winding-up petition. Only with advice, cost visibility and a realistic prospect that the ground and the company's position justify it.
Skipping straight to a statutory demand because it "sounds stronger" often creates dispute risk and cost without improving recovery. Start where the evidence and the debtor's conduct justify.
What we do (introducer only)
Debt Collection UK is a trading name of PASECOM GROUP LTD (company 17139327). We introduce unpaid B2B invoices against UK limited companies, LLPs and PLCs to independent partner agencies, who collect. We are not solicitors, not an FCA-authorised debt collector, and we do not serve statutory demands or present petitions. Creditors can be any UK business; debtors on files we place must be Ltd, LLP or PLC.
The fee is 15% of what is recovered, payable only when you have been paid. Recovery is not guaranteed. On a worked example only: if £10,000 is recovered, the fee would be £1,500 and £8,500 would be due to you. That is fee arithmetic, not a promise of recovery. Most claims partners place are £1,500 or more; the form may still accept smaller amounts. Invoice upload is mandatory.
Ready to instruct on an undisputed company invoice? Use the claim form on this page, or start from unpaid invoices / no collection, no fee.
Frequently asked questions
What is a statutory demand for a company debt?
It is a formal written demand in a prescribed form requiring a company to pay a debt. Under Insolvency Act 1986 section 123(1)(a), if a creditor owed more than £750 serves the demand and the company neglects for three weeks to pay, secure or compound the debt, the company is deemed unable to pay its debts. That can support a winding-up petition. This page is general information, not legal advice.
What is the minimum debt for a company statutory demand?
For the inability-to-pay ground in section 123(1)(a), the sum then due must exceed £750. Our partner agencies typically focus on commercial invoices of £1,500 or more. Forms may still accept smaller amounts; buyers' minimums can differ from the insolvency threshold.
How long does the company have to respond?
Twenty-one days from service. Insolvency (England and Wales) Rules 2016 rule 7.3 requires the demand to state that the company must pay within 21 days of service, after which the creditor may present a winding-up petition unless the debt is secured or compounded to the creditor's satisfaction. GOV.UK guidance matches that 21-day period.
Do I need a statutory demand before a winding-up petition?
No. A statutory demand is one route to prove that a company is unable to pay its debts. Section 123 also lists other grounds, such as an unsatisfied execution or proof to the court that the company cannot pay its debts as they fall due. A demand is therefore not a mandatory step before every petition. Take advice before any insolvency filing.
What if the debt is disputed?
Do not use a statutory demand as a pressure tactic on a genuine dispute. Courts treat insolvency process as unsuitable for resolving substantial contested liability. The company may apply for an injunction restraining presentation or advertisement of a petition. Pause hard escalation, particularise the dispute, and consider a letter before action or county court claim instead.
Can a company set aside a statutory demand?
GOV.UK's director guidance states you cannot challenge a statutory demand made against companies in the same way an individual can apply to set one aside. The company can apply to court to restrain a winding-up petition. Rule 7.3 also requires the demand to tell the company about that injunction right. This is educational summary only.
Is a statutory demand required before partner collection?
No. Many undisputed Ltd, LLP or PLC invoices settle after a partner demand without insolvency paperwork. Debt Collection UK is an introducer only. Partners collect. The fee is 15% of what is recovered, payable only when you have been paid. Recovery is not guaranteed.
What does the fee look like on a worked example?
If £10,000 is recovered on an accepted claim, the fee would be £1,500 (15%), leaving £8,500 to you. That is arithmetic on the fee line, not a recovery statistic. Recovery is not guaranteed.