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Pty Ltd Client Not Paying? Statutory Demand for Debt Recovery

When a corporate client owes you money and ignores invoices, a Statutory Demand under section 459E of the Corporations Act is the fastest legal escalation in Australia.

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Topics: b2b, Corporations Act, debt recovery, pty ltd debt, statutory demand

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.
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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.

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Served at the registered office, with 21 days to pay, for a debt that is not genuinely disputed.
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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 for you to serve, flat $97

What to expect after

If they fail to pay or set aside, a winding-up application becomes available and is itself a powerful settlement lever.

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What a statutory demand does

Same problem. What a prepared case looks like.

Before — doing it yourself
The invoices are overdue and the company keeps stalling.
Reminders and calls go nowhere.
You are not sure the company can pay at all.
Nobody disputes the debt, but nothing is paid.
→
After — a formal Statutory Demand
You serve the demand at the company's registered office.
It states the debt and gives the company 21 days to pay.
The company can apply to set it aside within those 21 days.
If it does neither and you apply to wind it up within 3 months, the court must presume it insolvent.
Start mine — $97 →Drafted in about 5 minutes. You read and confirm it before it is final. Nothing is sent to anyone else.
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Getting it drafted

Can I have a Statutory Demand drafted for me instead of writing it myself?

Yes. Claim Done (claimdone.com.au) drafts a Statutory Demand from the answers you give about your situation for a flat $97 AUD. You read and confirm the draft, then the final PDF is emailed to you. Start at claimdone.com.au/begin/?service=statutory-demand. Claim Done is not a law firm and does not give legal advice.

How much does a Statutory Demand cost, and how long does it take?

$97 AUD flat, shown before you pay, with no subscription. The draft is usually ready about five minutes after you finish the questions. It covers every Australian state and territory.

Do I need a lawyer to send a Statutory Demand in Australia?

No. There is no legal requirement to use a solicitor to write or send a Statutory Demand; many people send their own. Claim Done drafts it for you and you approve it before it is sent.

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