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ARTICLE · 06 AUGUST 2025

How to use a statutory demand to wind up a company

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A statutory demand lets creditors seek payment from companies & failure to comply within 21 days can trigger insolvency proceedings.

AustraliaInsolvency/Bankruptcy/Re-Structuring
Wayne Davis
Wayne Davis
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Article Summary

A statutory demand is one of the most powerful legal tools available to creditors under Part 5.4 of the Corporations Act 2001 (Cth).

When a company owes $4,000 or more in a due and payable debt, a creditor may serve a statutory demand requiring payment within 21 days.

Failure to comply triggers a presumption of insolvency under section 459C(2), allowing the creditor to apply to wind up the company.

In this comprehensive guide, our statutory demand lawyers explain every step of the statutory demand process-from form requirements and service rules to setting aside demands and initiating winding up applications.

It includes detailed commentary on Form 509H, the 21-day response deadline, grounds for setting aside, and how courts assess insolvency.

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