You invoiced a Pty Ltd client. The amount is undisputed — they signed off on the work, accepted delivery, took the benefit. The invoice is now 60, 90, or 120 days overdue. Phone calls go to voicemail. Emails are read and ignored. Your accounts receivable is carrying debt that is bleeding the business and the relationship is plainly over.
For undisputed corporate debts of $4,000 or more, a Statutory Demand under section 459E of the Corporations Act 2001 is the most powerful debt-recovery tool in Australian law. It bypasses ordinary court proceedings and forces the company either to pay within 21 days or be presumed insolvent — a presumption that supports a winding-up application.
The legal context
Section 459E of the Corporations Act allows a creditor to serve a statutory demand on a company for a debt that is due and payable and is not genuinely disputed. The company has 21 days to pay, secure the debt, or apply to set aside the demand. Failure to do any of those creates a presumption of insolvency under section 459C, which supports an application to wind the company up under section 459P. The statutory demand process is fast, formal, and disproportionately effective because directors understand its consequences.
Common pushbacks and why they fail
- “There is a dispute.” A genuine dispute must be more than bare assertion; the company must show a plausible contention requiring investigation.
- “We have an offsetting claim.” Set-off claims must be genuine and quantified, not invented after service.
- “We are negotiating.” Negotiation does not pause the 21-day clock once a demand is served.
- “Cash flow is tight.” Inability to pay is exactly the trigger the regime is designed to expose.
The document and what it does
A Statutory Demand is a formal document complying with the requirements of section 459E and the prescribed Form 509H. It identifies the creditor, the debtor company, the debt with sufficient particulars, and the 21-day period. Defective demands can be set aside, so it must be drafted correctly and served correctly on the company’s registered office.
What Claim Done delivers
- A compliant Form 509H statutory demand with accompanying affidavit
- Debt particulars and supporting invoice references
- Correct service to the registered office (we obtain it from ASIC)
- Guidance on the 21-day window and next-step winding-up application
- Drafted and served for a flat $79
What to expect after
The vast majority of companies served with a statutory demand pay inside 21 days because the alternative — a winding-up application on the public record — destroys their banking, supplier and customer relationships. If they fail to pay or set aside, a winding-up application becomes available and is itself a powerful settlement lever.