Statutory demands: what small businesses should know
A statutory demand is a formal demand under the Corporations Act for a company to pay a debt of at least $4,000 within 21 days. If it doesn't pay or apply to set it aside, it's presumed insolvent and you can apply to wind it up. It's a serious step, so get advice first.
When it can be used
Only against companies, not individuals or sole traders, and only for undisputed debts of $4,000 or more.
The 21 day clock
The company has 21 days to pay, reach an agreement, or apply to court to set the demand aside.
Why to be careful
If the debt is genuinely disputed, the demand can be set aside and you may pay costs. It's a big step that usually ends the relationship.
Try the simple steps first
Most overdue invoices get paid with timely, friendly follow up. Save formal steps for customers who won't engage at all.
Get advice
This is general information, not legal advice. Talk to a lawyer before issuing a statutory demand.
Sources
Last checked 6 November 2026.
Questions people ask
- What is the minimum debt for a statutory demand?
- The debt must be at least $4,000, and the company has 21 days to pay or apply to set it aside.
- Can I send a statutory demand to a person?
- No. Statutory demands are for companies under the Corporations Act. Get advice before using one.