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When creditors start formal action, deadlines are short and the consequences are serious. A statutory demand gives a company 21 days to respond, and ignoring it can lead to a court application to wind the company up.
These guides explain what each step means and what you can do, in plain English. They are general information, not legal advice. If you have received a demand or court documents, speak to a lawyer, a registered liquidator or a small business restructuring practitioner quickly.
More borrowing is not always the right response to pressure. We explain when it can make things worse, and the free and low-cost help available instead.
Last reviewed 25 Sept 2026
A creditor's statutory demand is a formal demand under the Corporations Act that gives a company 21 days to pay a debt of at least the statutory minimum, currently $4,000. If the company does nothing, it is presumed insolvent and a creditor can apply to have it wound up.
6 min read
A winding up application asks a court to order that a company be wound up and a liquidator appointed. It is most often made by a creditor after the company has not complied with a statutory demand.
5 min read
If your business is losing money, may be insolvent, or would borrow to pay old debts without a plan, more debt can make things worse. Talk to a financial counsellor, your accountant or a registered liquidator first.
7 min read