Statutory Demand and Winding-Up Petition: Preparing Your Bundle

Understanding the Statutory Demand Process

What Is a Statutory Demand?

A statutory demand is not, strictly speaking, a court document. It is a formal demand served on a debtor, requiring payment of a sum that is due and not genuinely disputed. For companies, it takes the form prescribed by the Insolvency (England and Wales) Rules 2016, and it must comply precisely with the statutory requirements.

Key Thresholds (as at 27 September 2026)

Note: The minimum threshold for individual bankruptcy petitions was increased from £750 to £5,000 in 2015 and remains at that level as at 27 September 2026. The company threshold remains at £750.

Requirements for a Valid Statutory Demand

A statutory demand served on a company must:

1. Be in the prescribed form — Form SD1 for a company; for an individual, the GOV.UK form that matches the debt (payable now, payable after a judgment, or payable in the future)
2. State the amount of the debt — clearly and accurately
3. Identify the creditor — by name and address
4. State the grounds — how the debt arises
5. Give 21 days for the company to pay, secure, or compound the debt to the creditor's reasonable satisfaction
6. Warn of consequences — that failure to comply may result in a winding-up petition

How to Serve a Statutory Demand on a Company

The statutory demand must be left at the company's registered office (s.123(1)(a)).

Critical point: A company cannot apply to set aside a statutory demand (that procedure is for individuals). It can apply to the court for an injunction restraining the creditor from presenting or advertising a winding-up petition, typically where the debt is disputed on substantial grounds (IR 2016 r.7.3(1)(k)). Keep proof that the demand was left at the registered office — a witness statement from the person who left it.

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From Statutory Demand to Winding-Up Petition

When Can You Present a Petition?

If the company fails to pay the debt, offer security, or reach a reasonable compromise within 21 days of the statutory demand being served, the creditor may present a winding-up petition to the court.

The petition is presented under section 122(1)(f) of the Insolvency Act 1986 — the ground that the company is unable to pay its debts. Section 123 defines inability to pay debts, and section 123(1)(a) provides that, where a statutory demand is not complied with, the company is deemed unable to pay its debts.

The Petition Document

The winding-up petition must be in the prescribed form and must contain:

Court Fees and Filing

As at 13 July 2026 (EX50; deposit per GOV.UK), the costs of presenting a winding-up petition are:

The Official Receiver's deposit is payable in advance and is used to fund the initial investigation into the company's affairs if a winding-up order is made.

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Preparing Your Evidence Bundle

Documents for the Statutory Demand Stage

At the statutory demand stage, you are not filing documents with the court. However, you should assemble and retain the following for your records (and for potential use in the petition):

• The statutory demand — a copy of the demand served on the company
• Proof of service — delivery confirmation or witness statement
• The underlying debt documentation — contract, invoices, correspondence
• Calculation of the debt — showing principal, interest, and any charges

Documents for the Winding-Up Petition Bundle

When presenting the petition, your bundle should be meticulously prepared. The court will scrutinise the evidence carefully, and any procedural deficiency may result in dismissal.

Verifying the Petition

The petition must be verified by a statement of truth (IR 2016 r.7.6).

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Opposing a Statutory Demand or Winding-Up Petition

If you are the company receiving a statutory demand or facing a winding-up petition, your response must be swift and decisive. The consequences of inaction are severe — a winding-up order effectively ends the company's independent existence.

Grounds for Opposing

Documents Needed to Oppose

If you are opposing a winding-up petition, your evidence bundle should include:

• Witness statement — setting out the grounds for opposition in detail
• Evidence of the dispute — correspondence, expert opinions, or other documents showing that the debt is genuinely contested
• Evidence of the cross-claim — if relying on a cross-claim, provide documentation supporting both the existence and quantum of the claim
• Evidence of payment — if the debt has been paid, include bank statements or payment receipts
• Evidence of solvency — management accounts, bank statements, and cash flow projections demonstrating the company's ability to pay its debts as they fall due

Time pressure: Under the Insolvency (England and Wales) Rules 2016, a company wishing to oppose a winding-up petition must file evidence in opposition at least 5 business days before the hearing date. Missing this deadline can be fatal to the opposition.

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The Hearing

Before the Insolvency and Companies Judge

Winding-up petitions in London are heard by the Insolvency and Companies Judge (formerly the Registrar) in the Rolls Building. Outside London, a petition is presented in the High Court or, where the company's paid-up share capital does not exceed £120,000, in the County Court hearing centre with insolvency jurisdiction (IA 1986 s.117(1)–(2)); where the company's registered office (the place it has longest been during the 6 months before the petition) is in the London insolvency district, the petition must be presented in the High Court (s.117(2A)).

At the hearing, the judge will consider:

1. Whether the debt is established and due
2. Whether the statutory demand was properly served
3. Whether the company has a genuine dispute or cross-claim
4. Whether the company is able to pay its debts
5. Whether a winding-up order is appropriate in all the circumstances

Possible Outcomes

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Important Procedural Warnings

The Gazette Notice

After the petition is issued, it must be advertised in the London Gazette at least 7 business days before the hearing. This is a mandatory requirement — if notice is not given, the court may dismiss the petition (r.7.10(5)).

The Gazette advertisement alerts the company's other creditors and the wider business community. Once the advertisement appears, the company's bank may freeze its accounts, and its trading relationships may be severely damaged. This is why the courts treat winding-up petitions so seriously — the mere advertisement of a petition can destroy a viable business.

Section 127 — Disposition of Property

Under section 127 of the Insolvency Act 1986, any disposition of the company's property made after the commencement of the winding up (which relates back to the date the petition was presented) is void unless the court orders otherwise. This means that payments made by the company after the petition date — including payments to suppliers, employees, and HMRC — may be clawed back by the liquidator.

Companies facing a winding-up petition should seek urgent legal advice about applying for a validation order under section 127 to permit continued trading.

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Using BundleCreator for Insolvency Proceedings

The procedural requirements for winding-up petitions are exacting. A missing document, an incorrectly formatted witness statement, or a failure to include proof of service can result in the petition being dismissed — wasting the court fee, the Official Receiver's deposit, and months of preparation.

BundleCreator helps you organise your insolvency evidence with precision:

• Upload the petition, statutory demand, witness statements, and supporting documents
• Organise into clearly labelled sections
• Apply automatic consecutive pagination
• Generate a court-ready index
• Export a professional PDF bundle for filing

For creditors pursuing a winding-up petition or companies preparing their opposition, having a properly structured bundle demonstrates procedural competence and commands the court's respect.

Prepare your insolvency bundle at BundleCreator.co

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Frequently Asked Questions

Can I serve a statutory demand by email?

No. The Insolvency (England and Wales) Rules 2016 do not currently permit service of a statutory demand by email. The statutory demand must be left at the company's registered office (s.123(1)(a)). For individuals, the creditor must do all that is reasonable to bring the demand to the debtor's attention and, if practicable, serve it personally (IR 2016 r.10.2); an individual can apply to set a demand aside, a company cannot.

What happens to the company's employees if a winding-up order is made?

Employees are usually dismissed when a company goes into compulsory liquidation. Employees are entitled to claim redundancy pay, unpaid wages, holiday pay, and notice pay from the National Insurance Fund (via the Redundancy Payments Service). Some employee claims rank as preferential debts (IA 1986 s.386 and Sch 6).

Can a winding-up petition be withdrawn?

Permission to withdraw may be given if, at least five business days before the first hearing, notice has not been gazetted, no notices of support or opposition have been received and the company consents (r.7.13).

What is the difference between compulsory liquidation and voluntary liquidation?

Compulsory liquidation results from a winding-up order made by the court, usually on the petition of a creditor. The Official Receiver is appointed as liquidator. Voluntary liquidation begins with a shareholders' resolution (s.84); it is a members' voluntary liquidation if the directors make a statutory declaration of solvency, otherwise a creditors' voluntary liquidation (ss.89–90). The procedural requirements, costs, and consequences differ significantly.

Can I present a winding-up petition without first serving a statutory demand?

Yes. A statutory demand is the most common route, but it is not the only way to establish inability to pay. A company is also deemed unable to pay its debts where execution on a judgment is returned unsatisfied in whole or in part (s.123(1)(b)), or where it is proved to the court's satisfaction that it is unable to pay its debts as they fall due (s.123(1)(e)). An undisputed debt left unpaid, or the company's own accounts, can be evidence of that.

What is a validation order, and when should I apply for one?

A validation order under section 127 of the Insolvency Act 1986 authorises the company to continue making payments and dispositions of property after the presentation of a winding-up petition. Without such an order, all post-petition dispositions are void if a winding-up order is ultimately made. Companies that wish to continue trading after a petition has been presented should apply for a validation order urgently — typically supported by evidence showing that continued trading is in the interests of creditors as a whole.

How long does the winding-up process take?

The statutory demand compliance period is 21 days.

If a winding-up order is made, the liquidation itself can take anywhere from several months to several years, depending on the complexity of the company's affairs and the value of its assets.

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This article is provided for general informational purposes only and does not constitute legal advice. The law and procedure described applies to England and Wales. If you are unsure about your specific situation, seek independent legal advice.