Issue a statutory demand

Get paid what you are owed or wind up the debtor company.

In business, some debtors will not pay until the consequences of not paying become more serious than the cost of settling. A statutory demand under the Corporations Act 2001 (Cth) creates exactly that consequence: fail to comply and the company becomes presumed insolvent, opening the door to a winding up application. The demand must comply with strict technical requirements to be effective. Errors in the form, the amount claimed, or the manner of service can result in the demand being set aside at cost to you. We prepare statutory demands that are technically correct and difficult to challenge, giving your debtor a clear choice between paying and facing a winding up application.

What is a statutory demand and why is it an effective debt recovery tool?

A statutory demand is a formal written demand served on a company under the Corporations Act 2001 (Cth) requiring payment of an undisputed debt of at least $4,000 within 21 days. If the company fails to comply without applying to have the demand set aside, it is presumed insolvent, creating the foundation for a creditor to apply to wind it up. The statutory demand is one of the most effective and cost-efficient mechanisms available to business creditors: it carries no court filing fee, moves quickly, and creates serious practical pressure on the debtor company to pay or negotiate, on pain of facing winding up proceedings.

Can a company dispute a statutory demand?

Yes. A company served with a statutory demand has 21 days to apply to the court to have it set aside. Grounds include a genuine dispute about the debt, an offsetting claim that reduces the amount below the threshold, or a technical defect in the demand that would cause injustice if not set aside. For this reason, statutory demands should only be used for debts that are genuinely undisputed. Using them for debts that may be disputed carries the risk that the demand will be set aside and you will be ordered to pay the debtor’s legal costs.

What happens if the company pays part of the debt but not all of it?

If a partial payment reduces the outstanding balance below the $4,000 threshold, the statutory demand may no longer be valid. If the partial payment still leaves a balance above the threshold, the demand may remain effective for the unpaid balance in some circumstances, but this requires careful consideration. We advise on how to handle partial payments so that you do not inadvertently compromise the demand’s effectiveness.

Can I serve a statutory demand for a debt that is the subject of existing legal proceedings?

You should be cautious about using a statutory demand where the debt is already the subject of contested legal proceedings, as the debtor may be able to establish a genuine dispute for the purposes of a set-aside application. A statutory demand is most effective where the debt is undisputed, evidenced by an invoice, a judgment, a written agreement, or similar documentation that makes the existence and quantum of the debt clear.

What is the minimum debt required for a statutory demand?

The minimum debt amount for a statutory demand under the Corporations Act 2001 (Cth) is $4,000. The amount can be made up of multiple debts owed by the same company, as long as the total reaches the threshold. If your debt is below $4,000, a statutory demand is not available and other enforcement mechanisms may be required.

A demand that is hard to set aside.

Real pressure, quickly.

A clear pathway to winding up.

Get started — the demand can be prepared and served quickly.

The statutory demand process moves fast once instructions are received. We can prepare and have the demand ready for service within a short turnaround, starting the 21-day clock running without delay.

A demand that can be set aside is worthless — and costs you twice.

You are owed money by a company debtor and ordinary debt recovery, including letters, calls, and judgment enforcement, has not produced payment. You need a formal mechanism that creates serious pressure and a clear pathway to winding up the debtor if they do not pay.

We will confirm the debt is eligible for a statutory demand and advise on any risk that it may be challenged.
We will prepare the statutory demand in the correct form required by law.
We will advise on proper service of the demand and manage the service process.
We will monitor the 21-day response period and advise on next steps, whether the debtor pays, negotiates, or applies to set aside the demand.
We will proceed to file a winding up application if the demand is not complied with and the circumstances warrant it.

You have a debt that is not being paid and a debtor company that has stopped responding.

You are owed money by a company for goods supplied or services rendered. The debt is clear, it is invoiced, due, and undisputed, but the company is not paying and has stopped engaging. You have a judgment, or the debt is clear enough that you are confident it would not be genuinely disputed. You need something with real teeth: a formal mechanism that forces the debtor to choose between paying you and facing the start of a formal insolvency process.

What's included in your statutory demand service

Debt eligibility assessment and challenge risk advice.
Statutory demand preparation in the correct statutory form.
Service advice and service management.
21-day period monitoring and response advice.
Winding up application if the demand is not complied with.

The cost of a defective demand.

A statutory demand that is technically defective can be set aside by the court at your expense, destroying the presumption of insolvency and forcing you to start again. Common defects include overstating the amount of the debt even by a small margin, serving the demand incorrectly, or using the wrong statutory form. If a demand is set aside, you lose the time-sensitive advantage the demand was designed to create. Meanwhile, the debtor company is free to continue dealing with its assets, and any urgency you created disappears entirely.

Here is how we create the pressure that gets you paid.

We start by confirming that the debt is correctly calculated and that there is no genuine dispute the debtor might use as a basis for a set-aside application. We then prepare the demand in the exact form prescribed by the Act, with the correct amount, correctly completed, and advise on service. Once served, the debtor has 21 days to pay, negotiate, or apply to have the demand set aside. In our experience, a well-prepared statutory demand from a law firm creates immediate and productive pressure. Debtors who have been ignoring invoices often become interested in resolving the matter very quickly. If they do not, we file the winding up application with the foundation already established.

How we get the demand right and get you paid.

Prepare, serve, and resolve.

Prepare the demand.

We review the debt, confirm eligibility, prepare the demand in the correct form, and advise you on service, ensuring every technical requirement is satisfied before the clock starts running.

Serve and monitor.

We manage service of the demand and monitor the 21-day period. If the debtor applies to set it aside, we advise on the grounds and defend the demand's validity.

Get paid or file the application.

If the debtor pays or proposes an acceptable settlement, the matter is resolved. If not, we file the winding up application immediately, building on the presumption of insolvency created by non-compliance.

Experienced statutory demand lawyers who get the technical requirements right.

We know how frustrating it is when a debtor knows they owe you money and simply will not pay, and when ordinary methods have run out of road. Our lawyers have prepared and served statutory demands for business creditors across a wide range of industries and have defended them against set-aside applications. We know where the technical requirements are demanding and where debtors and their lawyers look for grounds to challenge, and we prepare demands that close those gaps.

We understand you want to know the cost, before we get started.

We will map out our process, from beginning to end, so you know what the journey will look like before you get started.

We will provide you with a clear and detailed Work Proposal covering each step along the way.

Our fair fees are all-inclusive. No hidden costs for telephone calls, emails, photocopying, couriers, or coffee.

Our great lawyer guarantee

We want to be part of your team over the long term. We achieve this by adhering to these core principles:

Take the time

We listen carefully to understand what you want to achieve. Then we thoroughly explain our advice and step you through the documents. You can be sure you know the full consequences.

Share our knowledge

We will pass on as much knowledge as we can, so you can make your own informed decisions. We want to make you truly independent.

Stick to our knitting

We only do what we're good at. You can be confident that we know what we're doing and don't pass on the cost of our learning.

Work as one team

Someone will always be available to answer your questions, or point you in the right direction. You will also benefit from a range of perspectives and experience.

Fair pricing

For advice and documents, we provide a fixed or capped quote so you don't take price risk. If you're in a dispute, we map out the process and costs so you know what to expect.

It's your show

We're not in this for our egos. We're in it for a front row seat to witness your success.

Get your debt paid, or put the company into liquidation.

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