A Creditors’ Statutory Demand is a formal demand served by a creditor against a debtor company, requiring the debt to be paid within 21 days of service. A creditors’ statutory demand can be served under s459E of the Corporations Act (Cth).
Although it was not designed to be a debt recovery tool, there are dire consequences if a company ignores a statutory demand, as it will trigger the ability for the creditor to commence winding up proceedings against your company.
There are several strict requirements in which a statutory demand must abide by.
The minimum value of a debt to be demanded must be more than $2,000 (as at the date of publication). This includes any interest on the debt.
The statutory demand must be in the approved form (Form 509H), as per Section 459E of The Corporations Act 2001. This means it must:
- Be in writing;
- Be signed by or on behalf of the creditor; and
- By served at the debtor company’s registered office.
The nature of the debt must not be in respect of unliquidated damages or prospective liabilities.
If you have received a Creditors’ Statutory Demand and you cannot pay the debt you need to consult with an insolvency specialist immediately. At CRS Insolvency Services, our consultants are all highly trained in corporate insolvency assignments. We will provide professional advice to help you make the best decision for your company. Contact CRS Insolvency Services on 1800 210 073 for 24/7 free expert advice now.