One way creditors can recovery money from a company is with a Statutory Demand. This demand, made under the Corporations Act 2001 gives the company's director 21 from days from the day it's received to pay a specified sum of money.
If you receive a Statutory Demand, you have 21 days to either pay the debt in full or dispute the debt and apply to have the Statutory Demand set aside. But you need to act quickly. If you don't act within 21 days, your creditors can use your failure to comply as proof your company is insolvent. They can then file an application with the court to appoint a liquidator and wind it up.
Here at Revive, we talk to a lot of company directors who have had winding up applications made against them and in a lot of cases it happened simply because they didn't act within the 21 day time frame. Unfortunately, once the application is made, your options for dealing with the debt, other than paying it in full, are significantly reduced.
For example, instead of being able to appoint your own liquidator, you have to settle for whoever the creditors choose to wind up the company. And while you can appoint a voluntary administrator to try to save your company and restructure its affairs, the fact its insolvent makes the process more expensive.
So if you receive a Statutory Demand, avoid receiving a wind-up notice by talking to Revive as soon as possible. With our professional advise, you will have the widest range of options for dealing with your companies debt and minimise the risk of it being deemed insolvent.
Contact Revive Financial today to arrange a free and confidential consultation.