Step 1: Check a statutory demand fits
Section 289 of the Companies Act 1993 applies to debts owed by a company. Before preparing one, check four things:
- The debtor is a company. Look it up on the Companies Register. A sole trader, partnership or trust is not a company, and a statutory demand cannot be used against them.
- The debt is due. The payment date under your invoice or terms has passed.
- The debt is at least $1,000, the minimum prescribed by regulations under the Act.
- The debt is not genuinely disputed. This is the one that matters most. If the company has raised a real dispute about the work, the amount, or a counterclaim, a demand is likely to be set aside and you may be ordered to pay its costs.
New Zealand courts regularly criticise creditors who use statutory demands to pressure a company over a debt it disputes. If there is an argument about the debt, resolve it first, in the Disputes Tribunal or the District Court. A judgment then supports a demand that cannot be disputed.
Step 2: Prepare the demand
The demand must be in writing. It identifies the creditor and the company, states the amount of the debt and how it arises, and tells the company that it must, within 15 working days of service, pay the debt, or reach a compromise with the creditor, or give security to the creditor's reasonable satisfaction. It also tells the company it can apply to set it aside.
Get the company's legal name exactly as it appears on the register, and claim only what is clearly owing. A demand that gets these details wrong can be challenged.
Step 3: Serve it on the company
A statutory demand is served on the company, usually by delivering it to the company's registered office as shown on the Companies Register. The registered office is often an accountant's or lawyer's office rather than where the company trades. Keep proof of service, because the deadlines run from the date of service.
Step 4: Count the working days
Two periods start on the day the demand is served:
- 10 working days: the time the company has to apply to the court to set the demand aside, and serve that application on you.
- 15 working days: the time the company has to comply.
Working days exclude weekends, the national public holidays listed in the Act's definition of working day, and the period from 25 December to 2 January. Regional anniversary days are not excluded. Count carefully: everything that follows depends on these dates.
Step 5: Respond to what happens
The company pays
That is a common outcome where the company is solvent and the debt is undisputed. The matter ends.
The company proposes terms
If the company offers to pay over time, you can accept an arrangement that satisfies you. Document it, and be clear what happens if it is not kept.
The company applies to set the demand aside
The court will consider whether there is a substantial dispute about the debt, a counterclaim or set-off, or another reason to set it aside. This is a court proceeding and usually needs counsel.
The company does nothing
If the 15 working days pass without compliance, the company is presumed to be unable to pay its debts, provided an application to liquidate is made within 30 working days after the deadline. That application is filed in the High Court.
Step 6: Decide whether to apply to liquidate
Liquidation puts the company into the hands of a liquidator, who realises its assets for all creditors. Secured and preferential creditors are paid first. Weigh the likely return against the cost before you apply.
How we can help
We check the debt and the debtor, prepare and serve the demand, track the deadlines, and deal with whatever comes back. Where liquidation is worth pursuing, we arrange the application. See statutory demands and liquidation.
General information, not legal advice. This page describes New Zealand law and practice as at October 2026; the right step for a particular debt depends on its facts. Where a matter needs legal advice, we will say so.