Written by Kyle Rowston-Wolcott.
The temporary changes made by the Government will delay winding up proceedings based upon any new statutory demands for 6 months.
For the next 6 months…
The required minimum amount to issue a statutory demand for corporate debt has been increased from $2,000 to $20,000;
The time to respond to a statutory demand has increased from 21 days to 6 months.
If another company owes you or your company money, your claim must be at least $20,000 to issue a statutory demand and your company may have to wait up to 6 months for a response before you can file an application to wind up the company.
To Issue a Statutory Demand…
- Your claim must be undisputed and have a minimum value of $20,000
- You must sign and complete the mandatory Form 509H as well as an accompanying Affidavit; and
- You must allow the debtor at least 6 months to respond to your statutory demand.
If a company fails to respond to a statutory demand within the 6-month period it will be deemed insolvent, and the creditor may apply for the appointment of a liquidator.
Given the likely increase in court proceedings following this 6-month period, it is essential to file your claims as soon as possible to pursue any outstanding debts to avoid delays when the crisis is over.
Further, if you receive a demand, don’t wait until the last moment or ignore it. If you do, you may find your company the subject of winding up proceedings.
The contents are for informational purposes only and do not constitute legal advice, are not intended to be a substitute for legal advice and should not be relied upon as such.
Uther Webster & Evans can provide you with advice and assist you with your commercial and personal affairs call or email us to discuss.