Creditor's Statutory Demand
A formal written demand served on a company for a due debt, which if ignored can support a presumption that the company is insolvent.
What a statutory demand is
A creditor's statutory demand is a formal written demand served on a company requiring it to pay a debt that is due and payable. It follows a set form and process. If the company does not pay, reach a settlement, or successfully challenge the demand within the required time, this can give rise to a presumption that the company is insolvent, which a creditor may then rely on to apply to wind the company up.
Using it carefully
A statutory demand is a serious step and is generally suited to genuine, undisputed debts above the relevant threshold, rather than disputed claims. Companies that receive one should act promptly. This is general information only and not legal or financial advice. If you are weighing up a demand, you can refer a debt to discuss the right approach.
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