Help Responding to Statutory Demands.

Legal Advice for Statutory Demands

A statutory demand is a formal notice that a company owes a debt and must pay within fifteen working days or risk being placed into liquidation. It is one of the most serious debt recovery tools available to creditors, so fast and informed action is essential.

We help businesses respond quickly and confidently to protect their financial position and avoid unnecessary insolvency proceedings.

Why Fast Action Matters

Once a statutory demand is served, the time limit to act is strict. If no response or application to set it aside is made within fifteen working days, a creditor can apply to the High Court to liquidate the company.

Getting advice early allows you to check whether the debt is valid and decide whether to pay, dispute or negotiate a settlement.

What We Can Help With

We assist businesses with:

• Reviewing and assessing the validity of the debt claimed

• Preparing and lodging a formal response within the time limit

• Negotiating with creditors to reach a commercial resolution

• Applying to the High Court to set aside the statutory demand if appropriate

Our goal is to protect your business while minimising cost and operational disruption.

Commercially Focused Legal Advice

We understand the commercial pressure statutory demands can create. Our advice is:

• Clear and practical

• Focused on preserving your business and relationships

• Delivered in plain language so you can make confident decisions under time pressure

Where We Work

Our litigation team are based in Wellington and support clients throughout New Zealand.

Questions We Often Get Asked About Statutory Demands

What is a statutory demand?

A statutory demand is a formal written notice from a creditor claiming that your company owes at least ten thousand dollars and demanding payment within fifteen working days. It is one of the first formal steps a creditor can take to recover payment. If the company does not comply or challenge it in time, the creditor may apply to the High Court to liquidate the company.

What should I do if my company receives a statutory demand?

Act immediately. Check whether the debt is valid and whether there are any disputes or counterclaims. Do not ignore the notice or delay seeking advice. We help you assess your options and prepare the right response before the deadline passes.

Can a statutory demand be set aside?

Yes. A company can apply to the High Court to set aside a statutory demand if the debt is genuinely disputed, if the amount is incorrect, or if there is a valid counterclaim. The application must be filed within fifteen working days of receiving the demand.

What happens if I do nothing?

If a statutory demand is ignored, the creditor can apply to liquidate your company. Once liquidation begins, control of the company passes to a liquidator and trading usually stops. Taking early advice can help prevent this and preserve your options.

Can statutory demands be used against individuals?

No. Statutory demands only apply to companies registered under the Companies Act 1993. For personal debts, creditors must use other recovery processes such as judgment enforcement or bankruptcy proceedings.

Statutory demands are governed by sections 289 to 291 of the Companies Act 1993 and the High Court Rules 2016.