Speak Now, Or Forever Hold Your Peace

Key Points:

All companies, regardless of their size or solvency, must ensure that they have appropriate systems for dealing with statutory demands.

In my last article, I looked at the use of statutory demands. Time now to go through the looking glass and examine the impact of demands on the companies which receive them.

First, a brief recap ...

A company which receives a statutory demand has 21 days to respond. If it does nothing, it is deemed to be insolvent and will almost certainly be faced with a winding up application.

In a large number of cases, it has to be admitted, that deemed insolvency simply reflects reality. However, there are many other cases in which solvent companies create unnecessary problems for themselves by failing to act promptly on receipt of a demand.