statutory demand

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A standard form used for the enforcement of debts. It typically sets out a demand by a creditor to a debtor to honour payment of an amount owing and specifies a period of three weeks for repayment or other satisfactory solution. Failure to comply with the demand by the debtor will be evidence of an inability by the debtor to pay creditors and can be used to support a compulsory liquidation petition under the Insolvency Act 1986.

Subjects: Law — Accounting.

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