It is a useful way to pressure a company to pay its debts
Many companies paid once being issued with a Statutory Demand as they do not want to be potentially placed into liquidation.
Company receiving a statutory demand is in a fight for its life
The company only has 21 days after being served with the Statutory Demand to pay or have it set aside by the court.
There may be personal consequences for the directors
Directors found to be incurring debts while trading insolvent can be made personally liable for the debts.
A company may be wound up if it is insolvent
After 21 days you can make an application to have the company wound up for trading insolvent.