--- title: "Statutory Demand: You Have 21 Days | Astris Law" description: "Served with a statutory demand? You have 21 days to comply or apply to set it aside, or risk being wound up. What to do, from a Brisbane litigator." lang: en-AU json-ld: | [ { "@context": "https://schema.org", "@type": [ "LegalService", "LocalBusiness" ], "@id": "https://www.astrislaw.com/#organization", "name": "Astris Law", "legalName": "Astris Law Pty Ltd", "alternateName": [ "Astrons General Counsel", "Phronesis Litigation", "HeadStart Counsel" ], "url": "https://www.astrislaw.com", "logo": { "@type": "ImageObject", "url": "https://www.astrislaw.com/android-chrome-512x512.png", "width": 512, "height": 512 }, "image": "https://www.astrislaw.com/android-chrome-512x512.png", "description": "The Astris Law group gives directors and business owners the right legal capability for whatever their business needs, across corporate, disputes and regulatory. Not more lawyers than you need, the right one for the matter. 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If the company does not pay, secure or compound the debt, or apply to set the demand aside within that period, it is presumed insolvent and the creditor can apply to wind it up." } }, { "@type": "Question", "@id": "https://www.astrislaw.com/situation/statutory-demand#faq-2", "name": "Can the 21-day statutory demand deadline be extended?", "acceptedAnswer": { "@type": "Answer", "text": "No. The High Court has confirmed the deadline is absolute and cannot be extended by the court or by agreement. Both the application to set aside and the supporting affidavit must be filed and served within 21 days of service of the demand." } }, { "@type": "Question", "@id": "https://www.astrislaw.com/situation/statutory-demand#faq-3", "name": "What happens if my company ignores a statutory demand?", "acceptedAnswer": { "@type": "Answer", "text": "After 21 days the company is presumed insolvent under section 459C(2). The creditor can then file a winding up application, and the company bears the difficult and expensive burden of proving it is solvent. Directors who let the company keep trading also face personal exposure for insolvent trading." } }, { "@type": "Question", "@id": "https://www.astrislaw.com/situation/statutory-demand#faq-4", "name": "Can I issue a statutory demand to recover a debt owed to my business?", "acceptedAnswer": { "@type": "Answer", "text": "Yes, if the debtor is a company and the debt is at least $4,000, due and payable, and not genuinely disputed. The demand must be in the prescribed form with a verifying affidavit. Used properly it is one of the fastest debt recovery tools available; used against a disputed debt it will likely be set aside with costs against you." } } ] }, { "@context": "https://schema.org", "@type": "BreadcrumbList", "itemListElement": [ { "@type": "ListItem", "position": 1, "name": "Home", "item": "https://www.astrislaw.com" }, { "@type": "ListItem", "position": 2, "name": "Legal Guides", "item": "https://www.astrislaw.com/situations" }, { "@type": "ListItem", "position": 3, "name": "I've Received a Statutory Demand", "item": "https://www.astrislaw.com/situation/statutory-demand" } ] }, { "@context": "https://schema.org", "@type": "HowTo", "name": "What to do: I've Received a Statutory Demand", "description": "Served with a statutory demand? You have 21 days to comply or apply to set it aside, or risk being wound up. What to do, from a Brisbane litigator.", "step": [ { "@type": "HowToStep", "position": 1, "name": "Note the date of service immediately", "text": "The 21-day clock starts from the date the demand was served on your company, not the date you personally saw it. Check how it was served and calculate the exact deadline." }, { "@type": "HowToStep", "position": 2, "name": "Do not ignore it", "text": "Ignoring a statutory demand is one of the most dangerous things a director can do. After 21 days, the presumption of insolvency arises automatically. Once a winding up application is filed, your options narrow dramatically." }, { "@type": "HowToStep", "position": 3, "name": "Assess whether the debt is genuinely disputed", "text": "Is there a genuine reason to dispute the debt? Were the goods or services defective? Is there a contractual dispute? Do you have a cross-claim or set-off? These are grounds to set the demand aside." }, { "@type": "HowToStep", "position": 4, "name": "Consider your director duties", "text": "If your company is or may become insolvent, you have personal duties under the Corporations Act not to allow the company to incur further debts. Trading while insolvent exposes directors to personal liability." }, { "@type": "HowToStep", "position": 5, "name": "Get legal advice within days, not weeks", "text": "Given the 21-day hard deadline and the need to both file and serve any application, you need legal advice as early as possible. Leaving it to the last few days creates avoidable risk." } ] } ] --- [Skip to main content](#main-content) The Astris Law Group Astris Astris Law [Astrons Astrons General Counsel ](https://astrons.astrislaw.com)[Phronesis Phronesis Litigation ](https://phronesis.astrislaw.com)[HeadStart HeadStart Counsel ](https://headstartcounsel.astrislaw.com) [![Astris Law S Icon](/assets/astris-logo-icon-kBkGra_r.png)![Astris Law](/assets/astris-logo-full-wbEHTWR5.png)](/) [About](/about)[The Group](/philosophy)[Practice Areas](/practice-areas)[Articles](/articles)[Contact](/contact)[Start here](/contact) You have 21 days from service. The court cannot extend this deadline. # I've Received a Statutory Demand A statutory demand is a formal demand for payment of a debt of at least $4,000 served on a company under section 459E of the Corporations Act 2001. If you do not comply with it or apply to have it set aside within 21 days, the creditor can use it as the basis for a winding up application against your company. The court will presume your company is insolvent. This is not a debt collection letter -it is the first step toward having your company wound up. [Call (07) 3519 5616](tel:+61735195616)[Send Enquiry](/contact) [ Read our complete guide Statutory Demands under the Corporations Act: the complete legal guide (ss 459E-459J) ](/article/statutory-demands-corporations-act) ## What You Need To Know You have exactly 21 days from the date of service to either pay the debt, reach an agreement with the creditor or file an application to set the demand aside. The court cannot extend this deadline. If you do nothing, the creditor can file a winding up application in the Federal Court. The failure to comply with the statutory demand creates a presumption of insolvency that is very difficult to rebut. To set aside a statutory demand, you must demonstrate a genuine dispute about the existence or amount of the debt, or an offsetting claim that equals or exceeds the demanded amount. The threshold for a 'genuine dispute' is relatively low -you do not need to prove your case, only that there is a plausible basis for disputing the debt. The application to set aside must be filed in court AND served on the creditor within the 21-day period. Filing alone is not sufficient. Statutory demands are frequently used tactically in commercial disputes. They can be set aside if served for an improper purpose or if there is a defect that would cause substantial injustice. ## What To Do Right Now 1 ### Note the date of service immediately The 21-day clock starts from the date the demand was served on your company, not the date you personally saw it. Check how it was served and calculate the exact deadline. 2 ### Do not ignore it Ignoring a statutory demand is one of the most dangerous things a director can do. After 21 days, the presumption of insolvency arises automatically. Once a winding up application is filed, your options narrow dramatically. 3 ### Assess whether the debt is genuinely disputed Is there a genuine reason to dispute the debt? Were the goods or services defective? Is there a contractual dispute? Do you have a cross-claim or set-off? These are grounds to set the demand aside. 4 ### Consider your director duties If your company is or may become insolvent, you have personal duties under the Corporations Act not to allow the company to incur further debts. Trading while insolvent exposes directors to personal liability. 5 ### Get legal advice within days, not weeks Given the 21-day hard deadline and the need to both file and serve any application, you need legal advice as early as possible. Leaving it to the last few days creates avoidable risk. ## Your Four Options in the 21 Days Pay the debt in full. If the debt is genuinely owed and you have the money, paying is usually cheaper than fighting. Get written confirmation from the creditor that the demand is satisfied. Negotiate. Many demands resolve commercially: a payment plan, a reduced lump sum or security over an asset. Any deal must 'secure or compound' the debt to the creditor's reasonable satisfaction within the 21 days, and it must be documented - a verbal promise does not stop the clock. Apply to set the demand aside. If there is a genuine dispute about the debt, an offsetting claim or a serious defect in the demand, a court application filed AND served within 21 days stops the demand in its tracks. Setting aside is a technical exercise with strict evidence rules, so this decision needs to be made in the first week, not the third. Do nothing - which is a decision too, and almost always the wrong one. After day 21 your company is presumed insolvent, the creditor can apply to wind it up and continuing to trade can expose you personally as a director. ## Practical Mistakes That Sink Companies Treating the demand as just another collection letter and putting it in the 'deal with later' pile. The 21 days runs from service on the registered office - which may be your accountant's address, adding days of delay before you even see it. Negotiating in good faith past the deadline. Settlement discussions do not pause the clock, and creditors know it. If a deal is not signed with time to spare, file the set-aside application anyway to protect your position. Paying part of the debt without agreement. Part payment does not comply with the demand and the presumption of insolvency can still arise for the balance. Filing the application but forgetting to serve it on the creditor within the 21 days. Filing alone is not compliance with section 459G - this single slip is fatal every year for companies that try to handle it themselves. ## How We Can Help We act for companies that have received statutory demands and for creditors seeking to enforce them. We prepare and file applications to set aside statutory demands, negotiate settlements within the 21-day window and defend winding up proceedings where necessary. We also advise directors on their personal exposure and duties when the company's solvency is in question. [Learn more about our Dispute Resolution & Litigation practice](/practice/dispute-resolution-litigation) Related reading - [$21.6 Million Mortgage Enforced: Court Declines to Unwind a Risky Refinance](/article/mortgage-enforced-court-declines-unwind-risky-refinance) - [Litigation Cost in Eight Mile Plains: Commercial Dispute Lawyer Fees](/article/litigation-lawyer-eight-mile-plains-hourly-rates) - [Mandatory Injunctions in Australia: When a Court Will Order Someone to Act](/article/mandatory-injunctions-australia) ## Frequently Asked Questions ### What is a statutory demand? A statutory demand is a formal demand under section 459E of the Corporations Act 2001 (Cth) requiring a company to pay a debt of at least $4,000 within 21 days. If the company does not pay, secure or compound the debt, or apply to set the demand aside within that period, it is presumed insolvent and the creditor can apply to wind it up. ### Can the 21-day statutory demand deadline be extended? No. The High Court has confirmed the deadline is absolute and cannot be extended by the court or by agreement. Both the application to set aside and the supporting affidavit must be filed and served within 21 days of service of the demand. ### What happens if my company ignores a statutory demand? After 21 days the company is presumed insolvent under section 459C(2). The creditor can then file a winding up application, and the company bears the difficult and expensive burden of proving it is solvent. Directors who let the company keep trading also face personal exposure for insolvent trading. ### Can I issue a statutory demand to recover a debt owed to my business? Yes, if the debtor is a company and the debt is at least $4,000, due and payable, and not genuinely disputed. The demand must be in the prescribed form with a verifying affidavit. Used properly it is one of the fastest debt recovery tools available; used against a disputed debt it will likely be set aside with costs against you. You have 21 days from service. The court cannot extend this deadline. ## Don't wait until your options narrow. We can usually assess your position within a single consultation. Call us or send an enquiry and we will get back to you promptly. [(07) 3519 5616](tel:+61735195616)[Send Enquiry](/contact) ## Other Situations We Help With [Your Business Is Facing an Underpayment or Wage Theft Claim ](/situation/underpayment-claim)[Someone Is Dissipating Company Assets and You Need to Freeze Them Out ](/situation/freezing-order)[A Former Employee Is Breaching Their Restraint of Trade ](/situation/restraint-of-trade-breach) [![Astris Law S Icon](/assets/astris-logo-icon-kBkGra_r.png)![Astris Law](/assets/astris-logo-full-wbEHTWR5.png)](/) You don't need more lawyers. 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