The Commonwealth Government has raised the minimum threshold at which creditors can issue a statutory demand on a company from $2,000 to $4,000. A statutory demand is a formal demand for payment of a debt owed by a company, issued under the Corporations Act 2001
The Corporations Amendment (Statutory Minimum) Regulations 2021 prescribe a figure of $4,000 as the new statutory minimum. The Regulations commence on 1 July 2021, and apply in relation to statutory demands served on or after 1 July 2021.
On 1 January 2021 amendments to the Corporations Regulations 2001 commenced that prescribed a figure of $20,000 for companies that are eligible for temporary restructuring relief. This was in response to the economic impact of COVID-19. This threshold only applies for the period that a company is eligible, as outlined in section 458E of the Act. The provisions that prescribe the temporary $20,000 threshold end on 31 July 2021.
The threshold for issuing a bankruptcy notice for an individual was raised to $10,000, on 1 January 2021.
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Author: David Jacobson
Principal, Bright Corporate Law
About David Jacobson
The information contained in this article is not legal advice. It is not to be relied upon as a full statement of the law. You should seek professional advice for your specific needs and circumstances before acting or relying on any of the content.