Statutory Demands and Winding-Up Petitions: Bundle and Evidence Guide

Last updated: March 2026

Quick Answer

Statutory demands and winding-up petitions are among the most powerful (and consequential) tools in a creditor's arsenal. A statutory demand under sections 122 and 123 of the Insolvency Act 1986 is a formal written demand for payment of a debt exceeding £750 owed by a company. If the company fails to pay within 21 days, the creditor may present a winding-up petition asking the court to compel the company's liquidation. The evidence bundle for these proceedings must be precise — the wrong document or a procedural error can result in the petition being dismissed and the creditor facing an adverse costs order.

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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 March 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 March 2026. The company threshold remains at £750, though there have been periodic discussions about increasing it.

Requirements for a Valid Statutory Demand

A statutory demand served on a company must:

1. Be in the prescribed form — Form SD1 (for companies) or Form SD2 (for individuals)
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

Service of a statutory demand on a company should be effected at the company's registered office. Acceptable methods include:

• Personal delivery to the registered office
• Leaving it with a person at the registered office who acknowledges receipt
• Posting it to the registered office by registered post or recorded delivery

Critical point: Defective service is one of the most common grounds for challenging a statutory demand. If you cannot prove that the demand was properly served, the entire process may fail. Keep proof of service — a certificate of posting, signed delivery receipt, or witness statement from the person who effected service.

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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 failure to comply with a statutory demand is deemed evidence of inability to pay.

The Petition Document

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

Court Fees and Filing

As at March 2026, 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 — certificate of posting, 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.

The Verifying Witness Statement

The petition must be supported by a witness statement (formerly an affidavit) verifying the facts stated in the petition. This statement must:

• Be made by the petitioning creditor or an officer/employee with knowledge of the facts
• Exhibit the statutory demand and proof of service
• Confirm that the debt remains unpaid
• Confirm that no security has been offered
• State the deponent's belief that the company is unable to pay its debts

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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, they are heard by the District Judge at the relevant County Court hearing centre with insolvency jurisdiction.

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 — failure to advertise will result in the petition being struck out.

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. Service must be effected at the company's registered office by personal delivery or post. For individuals, the demand must be served personally. Defective service is a common ground for setting aside a statutory demand, so it is essential to follow the prescribed method.

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

The employees' contracts of employment are not automatically terminated by a winding-up order, but in practice, the Official Receiver or liquidator will usually dismiss employees shortly after the order is made. Employees are entitled to claim redundancy pay, unpaid wages, holiday pay, and notice pay from the National Insurance Fund (via the Redundancy Payments Service). These are preferential debts in the liquidation.

Can a winding-up petition be withdrawn?

A petitioning creditor can seek the court's permission to withdraw (or discontinue) the petition. However, the court will consider whether other creditors wish to be substituted as petitioner. If other creditors support the petition, the court may allow them to take over the proceedings rather than permitting withdrawal. The court's primary concern is protecting the interests of all creditors, not just the petitioner.

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 is initiated by the company's shareholders (a members' voluntary liquidation, where the company is solvent) or directors and creditors (a creditors' voluntary liquidation, where the company is insolvent). 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. Under section 123(1)(e) of the Insolvency Act 1986, the court may be satisfied that a company is unable to pay its debts if it is proved to the court's satisfaction that the company is unable to pay its debts as they fall due. This requires cogent evidence — typically a judgment debt that remains unsatisfied, or clear evidence of the company's financial position from its own accounts.

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 timeline from statutory demand to hearing is typically:

• 21 days — the statutory demand compliance period
• 7 to 14 days — preparing and filing the petition
• 8 to 12 weeks — from filing to the first hearing date
• Total: approximately 3 to 4 months from serving the statutory demand to the hearing

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.