Statutory Demand
  • Letters of Demand

Statutory Demand

Our specialist statutory demand lawyers at JCL Legal, based in Sydney CBD, have the expertise and experience to help you, if you have been served with a Statutory Demand. You must act urgently you cannot wait; you have to act within 21 days of the service of the Demand. We can get you out of trouble and save your company. In many of the cases we deal with, the Statutory Demand is withdrawn before the matter goes to court.

How to deal with a Statutory Demand

A Statutory Demand is a demand upon a company under the provisions of the Corporations Act. Failure to act and negotiate payment to have the Demand withdrawn or to make an application in the Supreme Court of New South Wales, before the expiration of the 21 day period, is deemed to be sufficient grounds to have a company wound up.

An application to set aside a Statutory Demand is made in the Supreme Court of New South Wales and must be accompanied by an affidavit setting out the grounds on which you rely to have the Statutory Demand set aside (deemed invalid). A Statutory Demand must be for a definite amount of money over which there is no dispute, properly described and the debtor (person owing the money) is properly described. If there is any error in the Statutory Demand or it is ambiguous, then there are grounds to have it set aside (made null and void).

Even when the Statutory Demand is drafted correctly, it has been our experience that most Creditors are willing to negotiate the debt. Our statutory demand lawyers will work with you to negotiate and arrange to pay the debt with a satisfactory regime. It is here that our team’s extensive business experience and negotiation expertise works to obtain a satisfactory outcome to have the Statutory Demand withdrawn.

Statutory Demand FAQs:

A Statutory Demand is a demand for payment of a debt owed by a company in accordance with the Corporations Act.

  • The debt is due and payable; and
  • There is no dispute regarding the debt or debts.
A company has 21 days to either pay the outstanding debt, have the issuer to withdraw the Statutory Demand or file and serve the issuer with an Application to Set Aside the Statutory Demand.
If the Statutory Demand has not been withdrawn or an Application is not filed and served on or before the 21 days after service the company is deemed to be insolvent. A company or person is insolvent when they cannot pay their debts when they become due and payable.
If the company has not had the Statutory Demand withdrawn or filed and served upon the issuer and application to set aside the Statutory Demand the company is deemed to be insolvent and the issuer then has a right to make a Winding Up application or petition to have the company wound up and its assets sold for the purposes of paying the debt.

The presumption of insolvency is only valid for 3 months from 21 days after the date of service, after that date the presumption lapses or becomes stale and no longer applies. Therefore a winding up application must be made prior to that date.

A Statutory Demand must be issued in the prescribed form 509H. The form must be drafted carefully to ensure that it complies with Section 459E(2) of the Corporations Act

Jeffrey Choy
Jeffrey Choy

Principle of JCL Legal

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Absolutely amazing. JCL Legal settled the entire legal issue, had my best interest at heart. Jeffrey was extremely patient and really had my back…


Balmain, Sydney

Jeffrey Choy

Jeffrey Choy

Principal of JCL Legal

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