Statutory Demand
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“Effective debt collection actions can have a lasting effect on the debtor and highly increases the potential of getting you paid.”
What is a Statutory Demand?
A statutory demand is a formal demand made by a creditor on a debtor company to pay a debt within 21 days under s459E of the Corporations Act 2001. The debt must be for more than $2,000, must not be in dispute and be due and payable.
A statutory demand is a very effective instrument for ascertaining whether a company can pay it’s debts as and when they fall due. A company is deemed to be insolvent if having received a statutory demand, it fails to pay the debt or have the demand set aside by a court within 21 days.
As debt collectors we can issue a Statutory Demand Notice for you.
A statutory demand is a very effective instrument for ascertaining whether a company can pay it’s debts as and when they fall due. A company is deemed to be insolvent if having received a statutory demand, it fails to pay the debt or have the demand set aside by a court within 21 days.
As debt collectors we can issue a Statutory Demand Notice for you.
Why use a Statutory Demand?
If the company does not pay the debt in full or fails to have the demand set aside by the court within 21 days, the company is deemed to be trading insolvent and you have the right to made application to place the company into liquidation.
A director has a positive duty to prevent insolvent trading under s588G of the Corporations Act 2001. There are various penalties and personal consequences for the director if found to be incurring debt while trading insolvent. These consequences can include civil penalties of up to $360,000, compensation proceedings and criminal charges, including imprisonment for up to 5 years.
As debt collectors we can guide you in these corporate insolvency matters.
A director has a positive duty to prevent insolvent trading under s588G of the Corporations Act 2001. There are various penalties and personal consequences for the director if found to be incurring debt while trading insolvent. These consequences can include civil penalties of up to $360,000, compensation proceedings and criminal charges, including imprisonment for up to 5 years.
As debt collectors we can guide you in these corporate insolvency matters.
Benefits of a Statutory Demand?
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.
You can control the appointment of the liquidator
If you make an application to have the company wound up you can request your preferred liquidator.
If you make an application to have the company wound up you can request your preferred liquidator.
Liquidator has the power to investigate the directors
The liquidator has the power to investigate the directors, including insolvent trading and unreasonable director related transactions.
The liquidator has the power to investigate the directors, including insolvent trading and unreasonable director related transactions.
Debt Collection and a Statutory Demand
Issuing a Statutory Demand can be a powerful debt collection action. ASIC has successfully prosecuted directors for allowing companies to incur debts when the company is insolvent, and has sought orders making directors personally liable for company debts.
Frequently Asked Questions
Issuing a Statutory Demand Notice is an effective debt collection tool. For more information about Statutory Demand's and how as debt collectors we can assist you, click on the
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