What is a statutory demand?

A business has the right to challenge a statutory demand that is issued against it. This is called getting the statutory demand set aside. If the court grants this, your business won’t have to move through bankruptcy until the demand is settled. You must make any application to set aside the demand within 18 days of the original demand being sent to you. One way to avoid bankruptcy proceedings altogether is to reduce your debt to less than £750. The help and legal advice of a company and commercial solicitor will be invaluable in these cases.

It is also possible for you to use statutory demands to place pressure on your debtors to pay their bills. Think of a statutory demand as a formal request by the courts that has similar legal weight to a letter your solicitor would send. Often, a statutory demand is all that is needed to get your business’s debts paid.

Issuing a statutory demand is a matter of completing a form that the court will then use to issue the demand. You can complete the form yourself, or have your company and commercial solicitor do this for you. Statutory demands can also be a good way of opening communication with your debtors in order to come to an agreement about the money that is owed to your business.

The important thing to remember if you receive a statutory demand is not to ignore it. This demand is from the court and you are expected to respond to the terms of the demand. Your company and commercial solicitor can help you deal with any statutory demands your business receives. And if you want to issue a statutory demand, be prepared for these to be disputed and potentially argued through the courts. Always consult a company and commercial solicitor before applying for a statutory demand to be issued against a debtor.

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