Statutory Demand (Ireland)

A Statutory Demand in Ireland puts a demand or grievance in writing, sets out what is owed or wrong, and states the action required to resolve it, and is shaped by the Consumer Credit Act 1995.

The Companies Act 2014 is the primary statute governing Irish company law. It consolidated and reformed the previous Companies Acts (1963 to 2013) and introduced a modern, thorough framework for Irish companies. Section 570 of the 2014 Act specifies three circumstances in which a company is deemed unable to pay its debts: (1) where a statutory demand has been served and the company has neglected to comply for 21 days; (2) where execution on a judgment against the company has been returned unsatisfied in whole or in part; and (3) where it is proved to the satisfaction of the court that the company is unable to pay its debts, taking into account its contingent and prospective liabilities.

For a statutory demand to be effective, several conditions must be met. The debt must be for a sum exceeding EUR 10,000 (an increased threshold introduced by the Companies Act 2014, replacing the previous EUR 1,269.74 threshold under the Companies Act 1963). The debt must be undisputed, presently due, and payable. The demand must be in writing and must be served at the company's registered office as recorded at the Companies Registration Office (CRO). The demand must clearly state the amount of the debt and the basis on which it is owed.

The statutory demand procedure in Ireland applies exclusively to companies — it cannot be used against individual debtors. For individual debtors, alternative procedures exist under the Bankruptcy Act 1988 (for adjudication of bankruptcy) and the Personal Insolvency Act 2012 (as amended by the Personal Insolvency (Amendment) Act 2015), which provides for Debt Relief Notices, Debt Settlement Arrangements, and Personal Insolvency Arrangements. The Insolvency Service of Ireland (ISI) administers these personal insolvency mechanisms.

For commercial debts, the European Communities (Late Payment in Commercial Transactions) Regulations 2012 (S.I. No. 580 of 2012), implementing Directive 2011/7/EU, provide for statutory interest on late payments between businesses at the ECB reference rate plus 8 percentage points and a minimum EUR 40 recovery cost. These amounts may be included in the amount stated in the statutory demand. Revenue Commissioners may also be creditors who serve statutory demands in respect of outstanding tax liabilities under the Taxes Consolidation Act 1997.

The Companies Act 2014 also provides creditors with the alternative of applying to the High Court for the appointment of a receiver or examiner where the debtor company is insolvent or approaching insolvency. Examinership under Part 10 of the 2014 Act provides a court-supervised process for rescuing insolvent companies with a reasonable prospect of survival, but a company that has received a statutory demand and cannot pay may be ineligible for examinership if a winding-up petition has already been presented. The Companies Registration Office (CRO) maintains a public register of all winding-up petitions and orders made by the High Court, and the publication of a winding-up petition can cause immediate and severe damage to the debtor company's banking facilities, supplier credit, and commercial reputation. Directors of a company that receives a statutory demand should immediately seek legal advice from a solicitor experienced in corporate insolvency, as failure to respond appropriately within the 21-day period can have serious personal consequences — including the risk of a declaration of restriction under section 819 of the Companies Act 2014 and disqualification under Part 14 of the 2014 Act if the company is subsequently wound up and the directors are found to have acted irresponsibly in relation to the company's affairs. Revenue Commissioners may be among the creditors who use the statutory demand procedure in respect of unpaid tax liabilities — they have priority creditor status under section 621 of the Companies Act 2014 for certain taxes in Irish winding-up proceedings. The Mediation Act 2017 (No. 27 of 2017) is also relevant in the context of a statutory demand — before presenting a winding-up petition, the creditor may consider whether mediation under the 2017 Act might provide a faster and more cost-effective route to recovery. Under section 16 of the Mediation Act 2017, a solicitor advising a client who is about to institute legal proceedings must advise the client of the option of mediation as a means of resolving the dispute. Section 570 of the Companies Act 2014 was substituted with effect from 3 December 2024 by the Companies (Corporate Governance, Enforcement and Regulatory Provisions) Act 2024 (No. 44 of 2024). Practitioners must confirm they are working from the revised text of section 570 as substituted by the 2024 Act, which enhances and amends the legislative framework for insolvency proceedings under the Companies Act 2014. The EUR 10,000 threshold and the 21-day compliance period remain in effect under the substituted provision.

A Statutory Demand is needed when a creditor in Ireland is owed an undisputed debt of more than EUR 10,000 by a company and wishes to use the formal statutory procedure under section 570 of the Companies Act 2014 to obtain payment quickly and effectively, without the delay and expense of ordinary debt recovery proceedings.

You need a Statutory Demand when: a company owes you an undisputed invoice for goods supplied or services rendered exceeding EUR 10,000 and has failed to pay despite previous demands; a company has defaulted on loan repayments and the outstanding amount exceeds EUR 10,000, and you wish to put the company on notice of potential insolvency proceedings; you hold a court judgment against a company that remains unpaid and you wish to use the statutory demand procedure as a precursor to winding-up proceedings if the judgment debt is not satisfied; or you are a commercial landlord and a company tenant owes arrears of rent exceeding EUR 10,000 that remain unpaid despite previous demands.

The statutory demand is particularly effective where the debtor company is solvent but is simply delaying payment of an undisputed commercial debt. The prospect of winding-up proceedings — with all the associated reputational damage, disruption to business, and potential personal liability for directors — concentrates the minds of company directors and frequently results in prompt payment of the outstanding debt. However, the statutory demand procedure should not be used where the debt is genuinely disputed, where the creditor owes a set-off or cross-claim to the debtor company, or where the debtor company is already insolvent or in liquidation. In these circumstances, the statutory demand may be challenged, and the costs of unsuccessful winding-up proceedings may be awarded against the creditor.

A solicitor should always be instructed to serve a statutory demand, to confirm it complies with the formal requirements of section 570 of the Companies Act 2014 and cannot be challenged on procedural grounds. Service must be effected at the company's registered office and proper records of service must be maintained.

A statutory demand should be distinguished from a letter of demand or a Notice of Default, which are informal pre-action documents that do not carry the same legal weight. A statutory demand is a formal legal step under the Companies Act 2014 that triggers statutory presumptions of insolvency if not complied with within 21 days, and its service creates a formal public record that may be discoverable in subsequent insolvency proceedings or commercial litigation. For this reason, the decision to serve a statutory demand should always be taken on legal advice from a solicitor experienced in corporate insolvency and commercial litigation. In some cases — particularly where the debtor company has substantial assets and is merely slow to pay rather than genuinely insolvent — a less formal approach (a telephone call, a letter of demand, or mediation under the Mediation Act 2017) may achieve payment more quickly and at lower cost than the formal statutory demand procedure. The statutory demand is most effective where: the debt is clearly undisputed and the debtor company has simply failed to pay without good reason; informal approaches have failed and the creditor is prepared to follow through with winding-up proceedings; the amount outstanding exceeds EUR 10,000 and is presently due; and the creditor has documentary evidence of the debt (such as invoices, a contract, or a court judgment) that cannot be easily challenged. The statutory demand should not be used as a debt collection tool for genuinely disputed debts, as the courts will restrain any resulting winding-up petition and may award costs against the creditor.

Creditors considering whether the debt meets the EUR 10,000 threshold should note that the threshold applies to the total debt outstanding at the date of service of the statutory demand, inclusive of principal and accrued interest but before deducting any amounts genuinely in dispute. Where the total is marginally above the threshold, the creditor should satisfy themselves that the full amount is undisputed before including it in the demand. The Companies (Miscellaneous Provisions) Act 2023 made minor technical amendments to the Companies Act 2014 that do not affect the EUR 10,000 threshold or the 21-day compliance period under section 570.

A valid Irish Statutory Demand under section 570 of the Companies Act 2014 must contain the following key elements.

Identification of the creditor: the full legal name and address of the creditor (the person or entity serving the demand); where the creditor is a company, its CRO number and registered office address must be included; and the name and contact details of the creditor's solicitor (if applicable).

Identification of the debtor company: the full registered name of the debtor company; its CRO registration number; and its registered office address, to which the demand must be delivered. Service must be at the registered office — service at a trading address or place of business may not satisfy the statutory requirement.

Amount of the debt: the total amount of the debt at the date of the demand, stated in Euro (EUR). The amount must exceed EUR 10,000 — any demand for a lesser sum will not trigger the statutory presumption of insolvency under section 570. Where interest has accrued (at the contractual rate or at the statutory rate under the Courts Act 1981 or the Late Payment Regulations 2012), the notice should particularise the principal and interest separately. Any late payment compensation under the European Communities (Late Payment in Commercial Transactions) Regulations 2012 may also be included.

Basis for the debt: a clear and accurate description of the basis on which the debt is owed — the underlying contract, invoice numbers and dates, supply of goods or services, court judgment, or other basis. The demand must demonstrate that the debt is presently due and payable.

Demand for payment and 21-day period: a formal demand for payment of the outstanding sum within 21 days of the date of service of the demand, as required by section 570 of the Companies Act 2014. The demand should also offer the company the opportunity to secure or compound the debt to the reasonable satisfaction of the creditor within the 21-day period.

Consequences of non-compliance: a clear statement that if the company fails to pay, secure, or compound the debt within 21 days of service, the creditor intends to present a petition to the High Court for the compulsory winding up of the company under section 569(1)(e) of the Companies Act 2014.

Service and record-keeping: the demand must be delivered to the registered office of the company in person or by registered post; a statutory declaration of service should be prepared and retained as evidence of service; and a copy of the demand and proof of service should be retained in case winding-up proceedings are subsequently presented.

Cross-border considerations: where the debtor company is incorporated in another EU member state but has its centre of main interests (COMI) in Ireland — as determined under the EU Insolvency Regulation (Regulation (EU) 2015/848 on insolvency proceedings) — the Irish courts have jurisdiction to open main insolvency proceedings. A solicitor should advise on the applicable jurisdiction before serving a statutory demand on a company with cross-border connections. Note that section 570 was substituted by section 32 of the Companies (Corporate Governance, Enforcement and Regulatory Provisions) Act 2024 (No. 44 of 2024), effective 3 December 2024; practitioners should verify the current wording of the substituted provision before drafting a statutory demand to confirm full compliance. Where the debtor is an overseas company with an Irish registered branch, the statutory demand must be served at the Irish registered office and the creditor should be aware that the company may challenge the Irish courts' jurisdiction over any winding-up proceedings. Anti-money laundering considerations: where the circumstances of the outstanding debt raise concerns about potential money laundering or criminal activity — for example, if the debtor's inability to pay is linked to suspected fraud — the creditor should seek legal advice before serving a statutory demand, as reporting obligations under the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010 may be engaged. Revenue Commissioners have priority status for PAYE, VAT, and certain other taxes in Irish winding-up proceedings under section 621 of the Companies Act 2014, which creditors should bear in mind when assessing their likely recovery in a liquidation scenario, particularly where the debtor company has significant tax liabilities. A creditor who is owed both secured and unsecured debt should consider whether to enforce the security separately rather than pursuing winding-up proceedings, as the appointment of a liquidator may affect the creditor's ability to enforce their security interest. The forms-legal.com Statutory Demand (Ireland) template covers the mandatory elements under Consumer Credit Act 1995.