Statutory Demand

Received a Statutory Demand? Stop the stress from creditors winding you up

A Statutory Demand is a claim made under 459E of the Corporations Act. Failure to comply with a Statutory Demand or apply to the Court to set it aside, will result in the company being “deemed” to be insolvent. The Corporations Act defines a company is insolvent if it is unable to pay its debts as and when they fall due.

The service and non compliance with the Statutory Demand allows a creditor that issued the Statutory Demand to apply to the Court for the appointment of an official liquidator to the company. The failure to comply with a Statutory Demand is the most common basis in which applications are made to the Court for the winding up of companies in Australia.

If you have received a Statutory Demand, you are required to pay a specified sum of money within 21 days from the date of the delivery of the statutory demand.

If you dispute the debt or there are irregularities with the document you have received, you should immediately seek independent legal advice and apply to the Court to set the demand aside on the basis that the debt, being the subject of the Statutory Demand, is genuinely disputed or there is an irregularity. This application needs to happen within the 21 day period.

Directors need to act quickly if a statutory demand is served upon their company otherwise their company may be deemed insolvent and could face a Notice of Winding Up Application once the 21 day period expires.

If you have received a Statutory Demand which you cannot comply with or would like more information in respect to this document call Insolvency Choice today.