Creditor's statutory demands

When a company owes you at least $4,000 and has no genuine dispute about it, a statutory demand gives it 21 days to pay. If it does not pay or apply to the court in time, it is presumed to be insolvent, and you can apply to have it wound up. Fixed fee: $880 including GST, plus the ASIC company search fee.

Start a statutory demand

1800 776 529

On this page: When to use it When not to What we prepare After service Common questions Enquire

When a statutory demand is the right tool

All of these should be true:

The debtor is a company. For an individual or a sole trader, the equivalent step is a bankruptcy notice, which needs a court judgment first.
The debt is due and payable now. Not a future instalment, and not damages that still have to be assessed.
It is at least $4,000. One debt or several debts can be combined to reach the minimum.
There is no genuine dispute about whether the debt exists or how much it is, and the company has no genuine claim against you that would offset it.

When it is the wrong tool

If the company has a real dispute about the debt, the court will set the demand aside, and you may be ordered to pay the company’s legal costs. A statutory demand is not a way to pressure a company over a contested claim. For a disputed debt, a letter of demand and then a court claim is usually the safer path. We tell you plainly if we think a demand would be at risk.

Companies outside Victoria

The Corporations Act 2001 (Cth) applies across Australia, so we can serve a statutory demand on a company registered anywhere in Australia.

What we prepare

A company search

A current ASIC extract confirms the company’s exact name, its registered office, and that it is not deregistered or already in administration or liquidation.

The demand

It must be in writing, in the prescribed form, state the debt and its amount, require payment within 21 days, and be signed for the creditor.

The affidavit

Unless the debt is a court judgment, the demand must come with an affidavit verifying that the debt is due and payable. You, or someone in your business who knows the facts, sign it before an authorised witness. We can witness it at our Frankston office.

Service

We serve the demand on the company at its registered office and keep a record of how and when.

After the demand is served

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The 21 days

The company has 21 days after service to pay the amount, secure it, or reach terms with you that you are reasonably satisfied with. Within the same 21 days it may apply to the court to set the demand aside. Many companies pay, or make an offer, well before the deadline.

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If the company does not pay

If the company does nothing within the 21 days, the court must presume it is insolvent on a winding up application made within the following three months. The application is made to the Supreme Court of Victoria or the Federal Court. We quote for that step separately, and we talk it through with you first: winding up a company that has no assets may cost more than it recovers.

Common questions

Have another question? Phone 1800 776 529 or send us a message.

Can I use a statutory demand against a sole trader or a partnership?

No. Statutory demands are for companies. For an individual, the step after a court judgment is a bankruptcy notice. See If they still do not pay.

Do I need a court judgment first?

No. If you already have a judgment against the company, the demand can be based on it, and no affidavit is needed.

Can I add interest?

Only interest that is already a debt due and payable, for example interest your contract charges on overdue invoices.

What if they pay part of it?

Tell us straight away. The amount demanded must stay accurate, and we advise whether to continue, vary the arrangement or withdraw the demand.

What does it cost if they apply to set it aside?

Defending that application is court work, quoted separately. If the dispute looks genuine, it may be better to withdraw early.

Law referred to

Corporations Act 2001 (Cth) ss 9 (definitions of “statutory minimum” and “statutory period”), 459C(2)(a), 459E, 459G, 459H.
Corporations Regulations 2001 (Cth) reg 5.4.01AAA and sch 2 (Form 509H).

Last reviewed: October 2026, by a Victorian solicitor with a current practising certificate. This page is general information about the law in Victoria as at October 2026. It is not legal advice about your circumstances.

Owed $4,000 or more by a company?

Send us the invoices and any correspondence. We reply within one business day.

Phone: 1800 776 529
Email: info@lettersofdemand.com.au
Hours: Monday to Friday, 9 am to 5:30 pm
Office: 435 Nepean Highway, Frankston VIC 3199. We act across Victoria by phone, email and online.