From 1 July 2021 the threshold at which a creditor can issue a statutory demand on a company will increase from $2,000 to $4,000 (The Corporations Amendment (Statutory Minimum) Regulations 2021).
The new threshold of $4,000 will apply to all statutory demands served on or after 1 July 2021.
A statutory demand is a formal demand for payment of a debt owed by a company and is issued pursuant to the Corporations Act 2001 (Cth). Statutory demands and their service must comply with the requirements set out in the Act.
Statutory demands are a useful tool for creditors to force a company to pay its debts. If the company fails to comply with a statutory demand within 21 days of valid service, the company is presumed to be insolvent and the creditor may make a winding up application.
When served with a statutory demand a company has 21 days to either comply with the demand (pay the debt owed or settle the matter with the creditor) or issue proceedings to set aside the statutory demand.
For assistance with debt related matters please contact Fleur Craig of Armour-Craig Legal on (03) 5636 4986 or fleur@armourcraiglegal.com.au.