Statutory Demand – Common Mistakes To Avoid
Receiving a Statutory Demand, whether in person or even through the mail, is something you cannot ignore. The Statutory Demand is a powerful document in Australia. Failure to respond to a Statutory Demand within 21 days will be interpreted as meaning your company is insolvent.
Section 95(A) of the Corporations Act provides that a company is solvent
if it is able to pay its debts as and when they fall due. Accordingly, the test as to whether or not a company is insolvent is that it is not
able to pay its debts as to when they fall due. A Statutory Demand is a demand for payment of an unpaid debt over $2000 which is overdue.
You may consider the issuing of a Statutory Demand (sometimes called a ‘stat demand’) to be a scare tactic by a debtor. However failure to respond can quickly be escalated to liquidation proceedings being started.
Learn more about >> Statutory Demand or call Streeterlaw today for legal advice. The quicker you act the better as 21 days can pass very quickly. Facing forced liquidation of your business over a debt is not something you can hope will go away or treat as a minor issue.