A creditor relying on a statutory demand to wind up a company must be owed more than £750 under section 123 of the Insolvency Act 1986, and GOV.UK treats £750 as the working minimum for any winding up petition. A bankruptcy petition against an individual needs debts of at least £5,000, the bankruptcy level in section 267. In both cases the debt must be shown through an unpaid statutory demand, an unsatisfied judgment enforcement or other evidence that the debtor cannot pay.

What is the minimum debt to wind up a company?

Section 122(1)(f) lets the court wind up a company that is unable to pay its debts, and section 123 defines that phrase. The only fixed figure is in section 123(1)(a): a creditor owed a sum exceeding £750 then due who serves a written demand in the prescribed form at the registered office, where the company then neglects for three weeks to pay, secure or compound the debt to the creditor’s reasonable satisfaction. Section 123(3) allows the £750 figure to be changed by order.

The other routes in section 123 carry no stated minimum: enforcement of a judgment returned unsatisfied in whole or part (section 123(1)(b)), proof that the company cannot pay its debts as they fall due (section 123(1)(e)), or proof that its assets are worth less than its liabilities, counting contingent and prospective liabilities (section 123(2)). GOV.UK’s guidance for creditors simply says a petitioner must be owed £750 or more and able to prove the company cannot pay. The underlying tests are explained in when is a company insolvent.

Note the wording: section 123(1)(a) needs a debt exceeding £750, so a demand for exactly £750 does not trigger the deeming rule.

What is the minimum debt for a bankruptcy petition?

Section 267(2)(a) requires the debt, or the total of the debts, to be equal to or more than the bankruptcy level. Section 267(4) sets that level at £5,000. The figure was raised from £750 by the Insolvency Act 1986 (Amendment) Order 2015 for petitions presented on or after 1 October 2015.

The debt must also meet the other conditions in section 267(2): it must be for a liquidated sum payable now or at a certain future time, it must be unsecured, the debtor must appear unable to pay it or to have no reasonable prospect of paying it, and there must be no outstanding application to set aside a statutory demand for it. A secured creditor can still petition under section 269 by offering to give up the security or by petitioning only for the unsecured balance, stating the estimated value of the security.

Can creditors add their debts together?

For bankruptcy, yes. Section 264(1)(a) allows a petition by one creditor or jointly by more than one, and section 267(1) says each petitioner must be owed the debt or at least one of the debts. GOV.UK confirms that a creditor can petition if owed at least £5,000 or a share of debts totalling at least £5,000. Two suppliers owed £3,000 each can therefore present a joint petition.

For companies, section 124(1) allows a petition by any creditor or creditors, including contingent or prospective creditors, together or separately. A small creditor can also support a petition someone else has presented rather than bringing its own.

How must the debt be shown against a company?

GOV.UK tells creditors to file form Comp 1, with three copies, and form Comp 2 confirming the petition details. The petition needs evidence of the debt, typically either:

  • a statutory demand, giving the amount and the date it was served, with the three week period expired; or
  • a court judgment, giving the amount awarded with costs and interest, the date, the court and the case number.

The statutory demand route is popular because it avoids suing first, but it is risky where the company disputes the debt. GOV.UK explains that a company can apply within 21 days of receiving a demand to restrain the creditor from presenting a petition. The petition goes to the High Court where paid up share capital is £120,000 or more, and otherwise to the nearest court dealing with insolvency. What happens next for the company is covered in compulsory liquidation.

How must the debt be shown against an individual?

Section 268 limits the ways an individual can appear unable to pay. For a debt payable now, either a statutory demand has gone unpaid and not set aside for at least three weeks, or enforcement of a judgment has been returned unsatisfied in whole or part. For a debt not yet due, section 268(2) allows a demand requiring the debtor to show a reasonable prospect of paying when it falls due.

GOV.UK says the creditor proves this with a certificate of service of the statutory demand (form N215) or a sheriff’s or bailiff’s statement showing a judgment that could not be satisfied. The creditor must also search for other bankruptcy petitions in the previous 18 months and attach a signed declaration. GOV.UK adds that a creditor who waits more than four months after the demand must explain the delay to the court, and that a demand cannot usually be made for a debt over six years old. A debtor’s options are in setting aside a statutory demand.

What does it cost to petition?

Petition Court fee Deposit Minimum debt
Winding up a company £352 £2,600 £750 (statutory demand route: more than £750)
Bankruptcy of an individual £352 £1,500 £5,000, alone or in total

These are the figures GOV.UK publishes for creditors. The deposit pays for administering the case. GOV.UK says fees may be recovered if the company can afford to repay them, but a creditor petitioning for a modest debt can easily spend more than it recovers. Supporting an existing bankruptcy petition is cheaper than presenting a new one.

When can a petition not be presented even if the debt is large enough?

  • While an application to set aside the statutory demand is outstanding (section 267(2)(d)).
  • While the debtor is in the debt respite scheme: GOV.UK says a creditor told the debtor is in a breathing space cannot petition. See breathing space.
  • Where a bankruptcy order has already been made. GOV.UK says the creditor should register as a creditor instead.
  • Where the debt is genuinely disputed and the company has applied to restrain a petition.

How might this work in practice?

Illustration only. A consultancy is owed £4,200 by a sole trader and £2,000 by that trader’s limited company. It cannot petition to bankrupt the trader alone because £4,200 is below £5,000, but a second supplier owed £1,500 by the same trader could join a joint petition, bringing the total to £5,700. Against the company, a statutory demand for £2,000 exceeds £750, so if it goes unpaid for three weeks the consultancy can petition, paying £352 plus a £2,600 deposit, almost £3,000 to chase £2,000. A county court claim may be the better commercial choice.

What mistakes are common?

  • Serving a demand for exactly £750 on a company, which does not meet the exceeding £750 test in section 123(1)(a).
  • Including disputed or unliquidated sums, such as unassessed damages, to reach £5,000.
  • Using a petition as debt collection where the debtor has a real defence, inviting a restraining application and a costs order.
  • Forgetting that HMRC uses the same thresholds. See HMRC winding up petitions.
  • Ignoring the four month window after service of the demand without being ready to explain the delay.

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Sources

Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 19 October 2026. Part of Accountapedia, the Solar Protect guide to UK tax and accounting. This page is general information, not personalised advice.