Once you serve a statutory demand, if the debt is not paid within 21 days, you can apply to wind up the company or make the individual bankrupt.
Only issue a statutory demand if there is no dispute that you are owed the money. If you serve a statutory demand and then issue a bankruptcy or winding up petition, the court must stop the proceedings if there is any dispute about the sum outstanding.
It is relatively easy to have a statutory demand set aside, and the court can order for costs against you.
Remember that issuing a statutory demand is a serious step. It should not be used unless the relationship with the person who owes money has totally broken down.
To issue a statutory demand, the party must be solvent and the debt must be for at least £750 (where the debtor is a company) or £5000 (where the debtor is an individual). The statutory demand gives the person 21 days' warning to settle the debt.