Statutory Demand and Winding up Petitions
Ordinarily, a statutory demand is a pre-cursor to a winding up petition when used against a company. Whilst a statutory demand is not a necessity prior to issuing a winding up petition, it can be important in certain circumstances.
Statutory demands are often used as a means of debt recovery by individuals and companies against other corporate entities. Whilst it is possible to proceed directly with a winding up petition against a company in circumstances where a debt remains unpaid, it can in certain circumstances be sensible to serve a statutory demand first. By doing this, it firstly avoids the need to prove, if required, that the debtor company is insolvent. An unanswered statutory demand means that the creditor can deem the debtor company insolvent.
A statutory demand is also cheaper to proceed with rather than a winding up petition. Statutory demand costs do not involve a court issue fee and simply involve solicitors’ costs for completing them together with the process server fee for issue. This avoids potentially an expensive winding up petition fee at court for the issuing of the winding up petition. If payment is made on the back of a statutory demand, then it is often a cheaper up front way of recovering the debt, although technically, the creditor may have issues seeking to recover legal costs against the debtor if the statutory demand debt is paid. Often it is a question of reviewing the underlying documentation and being advised as to the most appropriate course of action i.e. a statutory demand or a winding up petition in respect of a company.
If a statutory demand is used first and the debt is not paid after three weeks, then it is then possible on debts over £750 for the creditor to proceed with a winding up petition.
Contact an expert statutory demand solicitor now
Please contact one of our friendly expert statutory demand solicitors now for your consultation. At Francis Wilks & Jones, we have all statutory demand experience needed to deal with any type of statutory demand problem. Feel free to look at our website and the many different statutory demand examples of cases where we have successfully assisted our clients.
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