Atlas Claims InsightsPublished 9 October 2026 · Reviewed 14 October 2026 · 5 min readKey takeaways
- A statutory demand gives a company 21 days to pay or secure an undisputed debt of £750 or more.
- If unpaid, the creditor may petition to wind the company up.
- A company that disputes the debt on substantial grounds can apply to court to restrain a petition.
- Creditors should not use statutory demands for genuinely disputed debts.
A statutory demand is a formal demand for payment made under the Insolvency Act 1986. It is not a court document, but it is a serious step: it can be the gateway to a winding-up petition against a company.
The key rules for companies
- The debt must be for £750 or more and must be due and payable.
- If the company does not pay, secure or compound the debt within 21 days of service, it may be deemed unable to pay its debts.
- The creditor may then present a petition to wind the company up.
If your company receives one
Act immediately. Diarise the 21-day deadline from the date of service. If the debt is genuinely disputed on substantial grounds, the company can apply to court for an injunction to restrain the presentation of a winding-up petition. Unlike individuals, companies cannot apply to “set aside” a statutory demand; the remedy is to restrain the petition.
Do not ignore it. Even a debt you are confident is disputed needs a prompt, reasoned response, and usually advice from a solicitor experienced in insolvency.
Evidence of a genuine dispute
- Contemporaneous correspondence raising the dispute before the demand was served.
- Evidence of defects, short delivery or non-performance.
- A counterclaim or set-off of at least the amount of the debt.
For creditors: use with care
Statutory demands are designed for undisputed debts. Using one, or threatening a petition, over a debt that is genuinely disputed can be treated as an abuse of process, with costs consequences. Where the debt is disputed, negotiation or ordinary proceedings are usually the proper route.
How we help
We review the demand and the underlying claim, assemble the evidence of dispute, and coordinate with independent solicitors where an application to court is needed. Where the debt is partly due, we negotiate a structured settlement.
Quick answers
How long does a company have to respond to a statutory demand?
21 days from service to pay, secure or compound the debt.
Can a company set aside a statutory demand?
Not in the way an individual can. A company disputing the debt on substantial grounds can apply to court to restrain a winding-up petition.
Need help with a specific matter? Send us the documents for a free, confidential review, or message us on WhatsApp at any hour on +44 7429 535705. Start a case review.
This guide is general information about the law of England and Wales as at October 2026. It is not legal advice and may not cover your situation. Atlas Claims is not a law firm; for advice on your legal rights or on litigation, consult a qualified solicitor.
