It is common business practice for creditors (entities that are owed money) to seek payment of debts by issuing invoices, then phone calls if payment is not received and finally by delivering a letter of demand. Creditors of a company may issue a Statutory Demand for payment of a debt (total amount must exceed $2,000.00) as long as the debt is due and payable. A Statutory Demand can be used after default judgement has been entered.
Do not ignore a Statutory Demand, it could lead to the winding up of your company if it is not dealt with in a timely manner.
Companies that are served with a Statutory Demand have 21 days to apply to the Court to have it set aside. If they do not pay or contest the claim, the company will be deemed to be insolvent and ultimately be placed into liquidation.