How to Keep Your Company from Being Wound Up
Anyone who is going to try to force your company to pay money you owe will likely issue you with what is called a statutory demand. An example appears in this video so you know what it looks like when you see it.
To issue your company with a statutory demand, your creditor does NOT have to have a judgment against you – a lot of people think this. They are wrong.
If you receive a statutory demand you have to act IMMEDIATELY - unless you want to be wound up by this creditor. The creditor that winds you up gets to choose your liquidator.
To get rid of a statutory demand you have – 21 days from the date you receive it to file and serve the application and supporting evidence. Putting the statutory demand in your top drawer is not an option!
It is not hard to defeat a statutory demand. The you can force the creditor to go through the longer, more expensive and slower process of obtaining a judgment. All you have to do is satisfy the Court that your claim that the debt is disputed and your reasons for saying this are not “’plainly vexatious or frivolous’ or ‘may have some substance”, or that “a plausible contention requiring investigation’ exists, or there exist matters which, on rational grounds, indicate an arguable case on the part of the company which received the statutory demand.”
There’s a good chance that with experienced legal representation you can force your creditor to withdraw its statutory demand and to go through the usual long process of obtaining a judgment – without going to court.
Once the time to respond to the statutory demand expires every creditor you have can jump on the bandwagon and the liquidation of your company may be inevitable.
The best tactic is to immediately look at one of the other options you have so you make the decisions about the fate of your company. Hopefully find out how you can save it if it is experiencing problems that might be able to be overcome.
To consider all of these options you need expert legal advice – promptly from firms, like Pmf Legal that specialize in insolvency. Getting a General Practitioner to do your heart surgery is not a good way to go.
Pmf Legal Limited
9 September 2012
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