If your firm is the registered office for your corporate clients or other companies, you should keep a very attentive eye out for any letters, notices, Statutory Demands and Statements of Claim that may be “served” on your clients by post to your (un-attended) offices over the Christmas and New Year shutdown period.
Given the ATO’s recent spike in winding-up companies (i.e. pursuing them into liquidation), we are anticipating a flood of notices and Statutory Demands to be sent during the Christmas and New Year break, when offices are often closed. Leaving aside the ATO, we expect that many other creditors are planning to issue their Statutory Demands and Bankruptcy Notices in late December 2023 and early January 2024, so as to take advantage of the situation to the detriment of your clients.
These documents could also include anything from overdue bills, outstanding tax liabilities, unclaimed monies or documents with strict statutory deadlines for reply. Be mindful of all documents received, maintain precise records for receipt of documents including method of service, the date of receipt and promptly forward same to company officers/directors as soon as practicable.
We note that if any documents with strict statutory deadlines are posted to or left at your office whilst you are closed over the break, the timeframe for compliance will commence, and can expire, even though nobody may see the document for days if not weeks. Please note that extensions of time on the deadlines for compliance will not ordinarily be allowed on the basis that your office was closed. This could lead to severe consequences for your corporate clients including significant liability or, for example, deemed acts of insolvency for your corporate clients who do not comply with a Statutory Demand. Don’t let this happen to you or your clients, as it could risk the company being wound-up!
We refer to the Statutory Demands and Bankruptcy Notices that may be forwarded over the end-of-year period. Notably, they would claim that an individual has at least $10,000.00 outstanding in debts, or that a company owes debts of at least $4,000.00 (ordinarily*), that are unpaid. These notices operate on the basis that if payment of the debt is (a) not made in full and (b) settlement is not reached and (c) the company/individual does not commence NSW Supreme Court proceedings by the deadline, the company is presumed insolvent or an act of bankruptcy has been committed by the individual, which forms the basis for creditors to commence winding-up proceedings of the company or seek sequestration orders against the individual to bankrupt them (as the case may be).
The twenty-one (21) day deadline to comply with a Statutory Demand or a Bankruptcy Notice (which can be served via email) commences from the date that your office (whether your office is closed or not) receives the Demand/Notice and must be complied with (by payment/settlement) or NSW Supreme Court proceedings commenced within that twenty-one (21) day period, otherwise your clients are at serious legal risk (as above).
Don’t take a chance: Make sure that your mail is checked regularly and otherwise that your clients are contactable over the break to address any issues that may arise.
If you or your clients require any urgent assistance with any legal document or notice received or otherwise need to make an urgent application to set aside a Statutory Demand or Bankruptcy Notice over the Christmas and New Year period, kindly contact Mr Gavin Parsons at firstname.lastname@example.org or (02) 9262 4471.
Finally, we wish you, your family and colleagues a Merry Christmas and a Happy New Year from the team at Gavin Parsons and Associates!