The minimum balance of $4,000 to issue a Creditor’s Statutory Demand has commenced.
What is a Creditor’s Statutory Demand?
Well, a Creditor’s Statutory Demand is a demand for payment issued pursuant to the Corporations Act 2001 that requires payment within 21 days of service of the Demand. The recipient could also negotiate an arrangement or file an application to set aside the Demand within those 21 days.
Failure to respond to the Demand within the 21 day period, results in the recipient being presumed to be insolvent. Based on that position of insolvency, a creditor could then make an application to a court to wind up the company.
The 21 day period is strict. There are NO extensions possible and the recipient must file at a court and serve an application to set aside the Demand within those 21 days. The application must include all grounds of defence to the creditor’s claim as new grounds cannot be raised after the 21 days expires.
So don’t delay!! If your company receives a Demand, act quickly as the 21 day period goes fast and the Court will not entertain an application made after that time.
Call MSD Law today if you have received a Demand for advice on the next steps to satisfy the Demand.
Time is ticking…