Statuatory Demand

What is a Statutory Demand?

A statutory demand (also referred to as Form 509H) is a notice served by creditors to a company to recover debts owed by the company. The debt must be greater than $2,000 in order for the creditor to serve a statutory demand on the company.

A company who is served a statutory demand has a period of strictly 21 days to exercise one of the following options:

• pay the amount demanded if the company is solvent; or
• apply to Court for an order setting the demand aside

Failure to comply with one of the above options will result in the company being deemed as insolvent pursuant to Section 459C(2)(a) of the Corporations Act 2001. Subsequent of failing to comply with the statutory demand will expose the company at risk of the Court appointing a liquidator to wind up the company.

What should you do if you receive a statutory demand?

If you receive a statutory demand you should exercise one of the following options within 21 days of receipt of the statutory demand:

• Pay the outstanding amount if the company is solvent;
• Seek Court order to set demand aside; or
• Call us immediately on (02) 9231 0505 to provide you with FREE advice and assist you with your options