Owed HK$10,000 by a Company? A Statutory Demand Gives It 21 Days
Applies in Hong Kong SAR
The strongest debt-collection letter in Hong Kong is not written by a lawyer. It is a statutory demand — a prescribed written demand that starts a 21-day clock, after which a company that has not paid is treated as unable to pay its debts and can be wound up. The threshold is a debt of HK$10,000 or above. Filing the petition that follows costs a HK$1,045 court fee at the High Court Registry plus an HK$11,250 deposit with the Official Receiver's Office, payable before anything happens. For an individual debtor the same two numbers apply under a different ordinance. This article sets out the procedure, the costs, and the two situations where sending one is a mistake.
What is a statutory demand, and why is it stronger than a lawyer's letter?
A statutory demand is a written demand in a form prescribed by law, served on a debtor, requiring payment of a specific debt. It is not a lawsuit and it is not a court document — nobody signs it but you or your solicitor. Its power comes from what happens when it is ignored.
An ordinary demand letter asks. A statutory demand sets up a legal consequence: if the debtor does not pay, secure or compound the debt within the period given, the law treats that failure as evidence of insolvency. For a limited company that unlocks a winding-up petition to the Court of First Instance; for an individual it unlocks a bankruptcy petition. The Official Receiver's Office lists inability to pay a debt of $10,000 or above as one of the common grounds on which the court may wind up a limited company.
That is why it lands differently. A company with a bank facility, a landlord, or a tender in progress does not want a winding-up petition advertised in the Gazette against its name. The demand is a letter; the thing behind it is not.
The numbers you have to know before you send one
Every figure below is published by the Official Receiver's Office or the Community Legal Information Centre. There is no scale that rises with the size of the debt — the deposit and the court fee are the same whether you are owed HK$10,000 or HK$10 million, which is precisely why the arithmetic matters most at the bottom of the range.
| Item | Company (winding-up) | Individual (bankruptcy) |
|---|---|---|
| Minimum debt | HK$10,000 or above | HK$10,000 or above, unsecured |
| Time to comply | 21 days from service | 3 weeks from service |
| Court fee on the petition | HK$1,045 | HK$1,045 |
| Deposit with the Official Receiver | HK$11,250 | HK$11,250 |
| Provisional liquidator, if applied for | A further HK$3,500 | Not applicable |
| Advertising the petition | Gazette plus two daily newspapers, 7 clear days before the hearing | Not required at the petition stage |
Sources: Official Receiver's Office, Simple Guide on Compulsory Winding-up of Companies and Simple Guide on Bankruptcy; CLIC. Advertising cost depends on the size of the advertisement and is not fixed. Fees change — confirm the current figures with the Registry before you pay anything.
Read the deposit line twice. HK$12,295 leaves your account before the court has heard a word, and it is the Official Receiver's fees and expenses that the HK$11,250 covers, not yours. If you are owed HK$14,000, you are putting up most of the debt to chase it. That single comparison decides more of these cases than any point of law.
How do you serve it so that it actually counts?
Service is where self-made statutory demands fail. The rule for a company is narrower than most people expect, and there is no substitute for following it.
Serving a demand on a Hong Kong company
- Use the prescribed form — Form 1A — and state the debt precisely. A standard reminder or a bank's routine chaser is not a statutory demand, and CLIC says so expressly for the bankruptcy equivalent.
- Leave it by hand at the company's registered office. CLIC is explicit that it must not be sent by post, by registered post, by fax, or by electronic means.
- Give the company 21 days to pay. Date the demand and keep proof of when and where it was left.
- If 21 days pass without payment, prepare the petition — Form 2 or 3 in the Appendix to the Companies (Winding-up) Rules (Cap. 32H) — and deposit HK$11,250 with the Official Receiver's Office.
- Attend the Registry of the High Court to pay the HK$1,045 court fee, obtain a hearing date, and file the petition.
- Submit a copy of everything filed to the Official Receiver within 24 hours, file the verifying affidavit (Form 7 or 8) within four days, deliver a sealed copy to the registered office, and advertise 7 clear days before the hearing.
For an individual debtor the service standard is different in wording but the same in spirit: the creditor must use all reasonable ways to bring the demand to the debtor's attention, including delivery by hand. Where there are reasonable grounds to believe the debtor has absconded or is avoiding service, CLIC notes the demand may be advertised in one or more local newspapers, and the court may accept that as reasonable service.
One shortcut is worth knowing. If you already have a court judgment against an individual and execution has failed, the Official Receiver's Office guidance shows a creditor's petition can proceed on that basis — CLIC puts it plainly: a creditor who has obtained a judgment that the debtor has failed to pay does not have to issue a statutory demand first.
What happens once the 21 days run out?
Nothing automatic. The demand does not turn into money and it does not turn into a court order; it turns into the right to petition. If you choose to present one, the consequences start immediately and they fall on the company hard.
Winding-up is deemed to commence at the time the petition is filed. From that moment, any disposition of the company's property — including a transfer of shares — is void unless the court orders otherwise. In practice the company's bank account is frozen long before the hearing. That is the pressure that makes debtors pay, and it is also why the courts are unforgiving about petitions brought on shaky debts.
If you change your mind, you cannot simply withdraw. The Official Receiver's Office states that a petitioner wishing to withdraw a filed petition must apply to the court for approval, and must also pay the Official Receiver's costs.
When is a statutory demand the wrong move?
Individuals: the same two numbers, a different ordinance
For a person rather than a company, the route runs through the Bankruptcy Ordinance (Cap. 6). Under section 6, the debt in a creditor's petition must be equal to or exceed HK$10,000, must be for a liquidated sum, and must be unsecured. The statutory demand uses Form 162, 163 or 164 of the Bankruptcy (Forms) Rules; the petition itself uses Form 10, 10A or 10B.
The clock is expressed as 3 weeks. CLIC states the creditor must show the debtor failed to comply with, or set aside, the statutory demand within 3 weeks after it was served — and that there must be no outstanding application to set the demand aside when the petition is presented. The costs are the same pair: a HK$1,045 court fee and an HK$11,250 deposit with the Official Receiver.
Worth noting for anyone on the receiving end: a debtor may present their own bankruptcy petition, and the deposit is then HK$8,000 rather than HK$11,250, with no provision for exemption.
Where does this sit against just suing them?
A statutory demand is one rung on a ladder, and it is not the first. The forum below it decides whether the debt exists; the statutory demand assumes that question is already settled.
- Step 1 — Demand letterYour own letter, no fee
Costs nothing, creates a paper trail, and is the step a tribunal will expect to see.
- Step 2 — Sue for the debtSmall Claims Tribunal up to HK$75,000 (filing HK$20–HK$120); District Court above that
This is where a disputed debt belongs. No legal representation is allowed in the Tribunal.
- Step 3 — Enforce the judgmentWrit of execution, garnishee, charging order
Often faster and far cheaper than insolvency when the debtor has assets worth seizing.
- Step 4 — Statutory demand21 days, debt of HK$10,000 or above, no court fee to send it
For a debt that is clear and undisputed, against a debtor you believe can pay but will not.
- Step 5 — PetitionHK$1,045 court fee plus HK$11,250 deposit, plus advertising
The last rung. Non-trivial cost up front, shared recovery at the end.
Small Claims Tribunal figures from the Judiciary's published fee schedule (August 2023).
Common questions
Do I need a solicitor to send one? No rule requires it. The Official Receiver's Office notes that a solicitor is normally instructed to prepare and file a winding-up petition, and CLIC says a creditor may prepare a petition without a lawyer. The forms are prescribed; the risk is in the drafting and in service, not in the filing.
Does a statutory demand suspend the limitation period? No. It is a demand, not proceedings. The ordinary limitation rules still run — a claim founded on a simple contract must generally be brought within 6 years under section 4(1)(a) of the Limitation Ordinance (Cap. 347). If you are close to that date, issue proceedings and negotiate afterwards.
Can I use it to collect HK$8,000? Not by this route. The threshold in both ordinances is HK$10,000 or above, and you may not inflate a debt to reach it. Below that figure the Small Claims Tribunal is the forum, and at a filing fee of HK$20 for claims not exceeding HK$5,000 it is the cheaper answer anyway.
They paid on day 22. Is the petition still good? The safe assumption is that late payment does not automatically cure the position. CLIC, citing Kate Gaskell Richdale v Eugene Oh Jae-Hoon, records that a debtor who fails to pay in response to an unset-aside statutory demand is deemed unable to pay, and that payment afterwards does not show they were able to pay at the date of the petition. Practice on what the court then does with the petition varies with the facts; take advice before presenting one on a debt that has since been paid.
Sources: Official Receiver’s Office — Simple Guide on Compulsory Winding-up of Companies, Official Receiver’s Office — Simple Guide on Bankruptcy, CLIC — Procedures for presenting a winding-up petition, CLIC — Bankruptcy, IVA and winding-up of companies, Judiciary — Small Claims Tribunal. Figures are those published by the Official Receiver's Office, the Judiciary and the Community Legal Information Centre at the time of writing. Fees, deposits and prescribed forms change — confirm the current figures with the Registry before you file or pay anything. This is general information about procedure, not legal advice, and it does not tell you whether your own debt is disputed.