ATO STATUTORY DEMAND
If you’ve received an ATO statutory demand you need to make some fast decisions about your business. It’s the start of the legal debt recovery process and you have 21 days to take appropriate action.
S&R Partners Group would like to help you understand exactly what an ATO statutory demand means for your business.
What is an ATO Statutory Demand?
A creditor’s statutory demand for payment is a notice sent by someone you owe money to. It is a formal demand for payment of your debt. An ATO statutory demand gives you 21 days to pay your debt. If you fail to respond to the statutory demand within this time, your creditors can presume your company is insolvent. They are then within their rights to file winding up proceedings at court and seek to appoint a liquidator to your company.
A statutory demand can only be issued if there is no ‘genuine dispute’ in relation to the debt claimed in the demand. Any creditor can issue a statutory demand, however, this recovery tool is favoured by the ATO. In fact, the ATO was responsible for nearly 14% of all wind-ups in the 2015 financial year and it is continuing to be an active creditor.