A statutory demand may be a sign of company insolvency. A statutory demand enables a creditor to put official pressure on a company to pay an outstanding debt of at least £750. Left unanswered, a winding up petition and winding up order can ensue (up to 4 months later), forcing compulsory liquidation.
A Licensed Insolvency Practitioner can help to issue or deal with a statutory demand, starting with a possible court application to 'restrain' a creditor from applying to wind the company up.
Statutory Demand Options
A company in receipt of a statutory demand has 21 days to either pay the debt or reach an agreement to pay. If the company is unable to pay, the directors may consider a company voluntary arrangement, company administration or company liquidation, all formal insolvency procedures which Licensed Insolvency Practitioners can legally implement.
Any application to challenge and set aside a statutory demand (dismiss it) must be made within 18 days of its serving. A successful challenge (there's a genuine dispute) results in the statutory demand being rescinded and court costs being met by the creditor.
Call 0121 201 1720 for help with any aspect of dealing with statutory demands.
To wait until presentation of a winding up petition to pay the debt could be a costly error.