The routes available against a Cyprus company that will not pay, when a statutory demand is the right pressure, and when it is a mistake.
Establish Whether the Debt Is Disputed
The distinction that governs everything here is between a company that cannot pay, a company that will not pay, and a company that says it does not owe the money.
The statutory demand and winding-up route is designed for the second. It is not a mechanism for resolving disputes about whether the debt exists. Where the company raises a substantial dispute on genuine grounds, the correct route is an ordinary claim, and pressing on regardless can leave the creditor paying costs.
So the first exercise is documentary: the contract or invoices, the correspondence, any acknowledgement of the debt or part payment, and any complaint made about the goods or services at the time rather than after the demand arrived.
What the Statutory Demand Does
Section 212(a) of the Companies Law, Cap. 113, sets the terms, and all three are commonly got wrong. The debt must exceed €5,000. The demand is served by delivering it at the registered office of the company, not on a director and not at a trading address. And the company must neglect, for the next three weeks, to pay the sum or to secure or compound it to the creditor's reasonable satisfaction.
Where all three are satisfied the company is deemed unable to pay its debts, which is the ground for winding up in section 211(e). That deeming provision is the whole of the demand's power: the letter itself does nothing, and what follows it does.
The demand is a formal notice that the sum is owed and that failure to pay may be treated as evidence of the company's inability to pay its debts, opening the way to a winding-up application.
Its force is commercial rather than procedural. A solvent company facing a winding-up petition risks its banking arrangements, its supplier terms and its reputation, all over a debt it could have paid. That asymmetry is why demands work.
Before You Serve It
Three checks are worth doing first, and they take less time than the demand itself.
- Is the debtor the entity you think it is? Check the exact registered name and number, not the trading name on the invoice.
- Is there anything to recover? A winding up produces a distribution only if assets exist. Where they do not, the process costs money and returns nothing.
- Is anyone else already enforcing? If secured creditors will absorb everything, an unsecured creditor may recover more by settling than by petitioning.
If the Company Still Does Not Pay
A winding-up application places the company's affairs in the hands of a liquidator, who realises the assets and distributes them according to the statutory order of priority. Unsecured creditors rank behind secured creditors and preferential claims.
This is why winding up is best understood as leverage rather than as a recovery method. Most creditors who succeed with it succeed because the company paid before the hearing, not because the distribution made them whole.
The Alternative Routes
Where the debt is disputed, or where the company genuinely cannot pay, other routes serve better: an ordinary claim followed by judgment and enforcement, a charge over property, attachment of movable assets, garnishee proceedings against bank accounts, or a structured settlement with guarantees or security attached.
A settlement backed by a personal guarantee from a director is frequently worth more than a judgment against an empty company.
If a Cyprus company owes you and will not pay, tell us the company's exact registered name and number and whether it disputes the debt, at office@kleanthousplatis.com, or the enquiry form. We reply within one business day.
The threshold, and the three weeks
A statutory demand is not a solicitor's letter under another name. It is the first limb of section 212(a) of the Companies Law, Cap. 113, and that is why it carries the weight it does.
The section provides that a company is deemed unable to pay its debts where a creditor to whom the company owes a sum exceeding EUR 5,000 has served on the company, by leaving it at the company's registered office, a demand requiring the company to pay the sum due, and the company has for the next three weeks neglected to pay the sum or to secure or compound for it to the reasonable satisfaction of the creditor.
Three elements, all of them technical. The sum must exceed EUR 5,000. Service must be at the registered office, not at the company's trading address and not on a director personally. And the three weeks run from service.
Section 212(b) gives a second route, with no demand at all: where execution or other process issued on a judgment in favour of a creditor is returned unsatisfied in whole or in part. Section 212(c) gives a third: where it is proved to the satisfaction of the Court that the company is unable to pay its debts as they fall due. The statutory demand is the cheapest of the three, which is why it goes first.
Frequently Asked Questions
Is there a minimum amount?
Yes. Section 212(a) of Cap. 113 requires the sum owed to exceed EUR 5,000. Below that, a statutory demand does not raise the deemed inability to pay, and the winding-up route does not open this way.
Where must it be served?
At the company's registered office. Section 212(a) says so in terms: the creditor serves the demand "by leaving it at the registered office of the company". Service at trading premises, by email, or on a director personally is not the same thing, and it is among the commonest reasons a demand collapses later.
How long does the company have?
Three weeks. Section 212(a) deems the company unable to pay its debts where, for the three weeks after service, it has neglected to pay the sum or to secure or compound for it to the reasonable satisfaction of the creditor. Paying, securing and compounding are three separate escapes, and the last two are routinely overlooked.
Is there a route without a statutory demand?
Two. Section 212(b) is satisfied by execution on a judgment in favour of a creditor being returned unsatisfied in whole or in part. Section 212(c) allows proof, to the satisfaction of the Court, that the company is unable to pay its debts as they fall due. Both cost more than a demand, which is why the demand comes first.
Can I serve a statutory demand for any debt?
It should be used where the debt is clear and undisputed. Serving one over a genuinely disputed debt can result in the application being dismissed and costs being awarded against the creditor.
How quickly does it work?
Many debts are paid or settled at the demand stage, before any application is filed. Where they are not, the timetable is that of court proceedings.
Will I get all my money back if the company is wound up?
Only if assets remain after secured and preferential claims. Unsecured creditors rank behind both.
The company has no assets. Is it worth it?
Usually not, on its own. Where there is no realistic prospect of recovery we say so at the start rather than after a year of fees.
Related Reading
By Klitos Platis, Advocate. Klitos advises on litigation, corporate and commercial law, real estate, construction and energy at Kleanthous & Platis LLC in Nicosia.
This article is for general information only and does not constitute legal advice. Laws and their application can change, and individual circumstances differ. For advice on your own matter, contact Klitos Platis at klitos@kleanthousplatis.com or telephone +357 22 680 330.
Klitos Platis
Advocate, Partner
Kleanthous & Platis LLC, Nicosia · Published 24 July 2026
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