John Molnar

John Molnar

COVID-19 Statutory Demands on Companies for debts

The Federal Treasury has issued a Fact Sheet – Temporary Relief for financially distressed businesses. This affects creditors issuing statutory demands on companies for debts owing, and the time companies have to respond to the statutory demands they receive.

In summary. the minimum amount of debts in question is raised from $2,000 to $20,000, and the company has 6 months, rather than 21 days, to satisfy the demand – or apply to set it aside.

There is also temporary relief for directors from personal liability for trading whilst the company may be insolvent. These measures will no doubt be welcomed by businesses suffering a dramatic loss of income due to the COVID-19 crisis.

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