Statutory Demand Preparation Checklist

Before you start

A statutory demand is a formal demand on a company that can have major consequences, so it is not a routine reminder. It is generally only appropriate for a debt that is due and not genuinely in dispute. Before you go near one, confirm the debtor is a company, the amount is owed and payable, and there is no real argument about it.

• Confirm the debtor is a company, not an individual or partnership.
• Check the debt is due, payable, and not genuinely disputed.
• Gather the invoices, contract and statements that prove the amount.
• Make sure you understand the strict rules before drafting anything.

This is general information only and not legal advice. Statutory demands are governed by detailed rules and tight deadlines — get professional advice before issuing one, as errors can be costly.

Test whether it is the right tool

1. Confirm there is no genuine dispute about the debt or any offsetting claim.
2. Check the amount meets the relevant statutory threshold — verify the current figure rather than assuming.
3. Consider whether a letter of demand or recovery action is a better first step.
4. Assess whether the company can actually pay if pushed.
5. Weigh the risk that the company applies to set the demand aside.

Issuing a statutory demand over a genuinely disputed debt can backfire, with the company applying to have it set aside and seeking costs. Using it only for clear, undisputed debts is what keeps it a strong tool rather than a liability.

Prepare and serve

1. Draft the demand in the correct prescribed form, with accurate company details.
2. State the debt precisely and attach or verify any supporting material the rules require.
3. Have the document signed and supported as required.
4. Serve it on the company in a manner the rules permit, and record how and when.
5. Diarise the response period and the steps that follow if the debt is not paid.

Defects in form or service can render a demand ineffective. Getting the document and the service method right the first time avoids handing the company an easy technical escape.

Common mistakes

• Using a statutory demand over a debt that is genuinely disputed.
• Getting the prescribed form, signature or supporting material wrong.
• Serving the demand incorrectly, so it can be challenged on a technicality.
• Assuming the threshold figure without checking the current amount.
• Treating the demand as a bluff rather than a step you are prepared to follow through.

Because the stakes are high, a free debt appraisal followed by professional advice is the sensible path before issuing a statutory demand.