The minimum amount for issue of a statutory demand increases from 1 July 2021.
The Corporations Amendment (Statutory Minimum) Regulations 2021 permanently increases the amount at which a creditor can issue a statutory demand to a company. This ‘statutory minimum’ will be increased from $2,000 to $4,000.
The By Lawyers Insolvency – Company liquidation Guide has been updated with an Alert, to assist practitioners who may be advising clients about their debt recovery options and need to consider the forthcoming increase. The commentary will be amended accordingly in due course.
A statutory demand, under s 459E of the Corporations Act 2001, for a company to pay a debt due and owing, can be a precursor to an application for winding up the company, relying upon non-compliance with the demand to establish a presumption of insolvency. The demand may be contested on the grounds of a genuine dispute about the debt, given that the demand does not need to be based upon a judgment.