Statutory Demands

There is little scope for error for creditors or company debtors where Statutory Demands are concerned. The consequences for failure to comply with a demand are harsh.

The Courts are unforgiving and a failure to properly issue a demand can be expensive. A statutory demand notice is a formal, attested demand issued under section 459E of the Corporations Act 2001. It is a very effective debt recovery tool for debts owed by companies if used properly.

If such a demand is correctly issued and served and the debtor company fails to pay the debt within 21 days from the date of service of the demand, or otherwise fails to make arrangements to pay the debt to the creditor’s satisfaction, the company is presumed “insolvent” and the creditor can make an application to wind the company up.

For more information on statutory demands, and the recent Federal Court of Australia judgment in the case of R2M Pty Limited v Gourlay [2011] FCA 168, view the following brochures: Federal Court Sets Aside Inappropriate Statutory Demand, Statutory Demands: Pay Up or Wind Up.