Following the commencement of small business insolvency changes on 1 January 2021 (see here), Treasury is consulting on whether to permanently raise the minimum threshold at which creditors can issue a statutory demand on a company to $20,000 or some other amount.
A statutory demand is a formal demand for payment of a debt owed by a company, issued under the Corporations Act 2001.
Since 1992 and currently, a statutory demand can be issued on a company in relation to a debt that is due and payable and totals at least $2,000.
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.