IRD statutory demand: what it means and what you can do in 15 working days

A statutory demand is the point where IRD stops asking and starts a legal process. It’s frightening to receive, and that’s partly the point. But a demand is also a clear set of instructions with a deadline, and businesses that act inside that deadline often come through it intact.

What is an IRD statutory demand?

It’s a formal demand served on a company under section 289 of the Companies Act 1993. It sets out the debt and requires the company to do one of three things within the time allowed:

1. Pay the amount demanded;
2. Settle the debt in a way the creditor (here, IRD) accepts; or
3. Apply to the High Court to have the demand set aside.

Insolvency and law firms consistently describe the time allowed as 15 working days to comply, with a set-aside application generally due within 10 working days of service (McDonald Vague, secondary source).

If the company doesn’t comply, the law presumes it’s unable to pay its debts. That presumption is what IRD relies on when it applies to the court to put the company into liquidation.

How common are IRD statutory demands now?

Much more common than they were. In the nine months to 31 March 2026, IRD issued 1,525 statutory demands, up 19% on the previous year, and had 605 companies liquidated (IRD quarterly report, January to March 2026). A statutory demand is no longer a rare last resort. It’s a routine step in IRD’s collection process for companies that haven’t engaged.

How do you count the 15 working days?

Carefully, and with a lawyer. “Working day” has a legal meaning that leaves out weekends, national public holidays and a period over Christmas and New Year. The date of service also matters, and it depends on how the demand was delivered.

Our statutory demand deadline counter gives you an estimate of both marks from the date you enter. Treat it as a planning aid, then confirm the exact dates with your lawyer on day one.

What are your real options?

Option	What it involves	Watch out for
Pay in full	Clear the amount demanded before the deadline	Make sure payment reaches IRD in time, and get confirmation
Settle with IRD	Agree terms IRD accepts, in writing	A verbal promise doesn’t stop the clock
Apply to set aside	Lawyer files in the High Court within the window	Only works for genuine grounds, such as a real dispute
Do nothing	The company is presumed insolvent	Liquidation proceedings can follow quickly

For most businesses that owe the money and want to keep trading, the practical choice is between paying and settling. That’s where funding comes in.

Statutory demand on your desk? Tell us the date it was served. Start an urgent enquiry. No credit check to enquire, and a real person reads it.

Can a loan pay a statutory demand in time?

Often, yes, particularly with property security. Property-secured business loans run from $20,000 to $5,000,000, and because decisions rest mainly on equity, funding is possible in as little as 24 hours once the paperwork is in place. Cash-flow options for trading businesses are typically $5,000 to $500,000.

The key is starting early. A loan that could settle in a few days still needs a valuation, a title check, signed documents and sometimes legal advice for guarantors. Starting on day two gives you room. Starting on day thirteen may not.

Paying the demand in full also stops the penalties and use-of-money interest on that debt and takes the company out of the liquidation pipeline. If the company also faces credit reporting because the debt is over $150,000, clearing it addresses that too.

What should you not do?

• Don’t ignore it or assume IRD won’t follow through.
• Don’t move assets out of the company or start a new company to carry on the business. That raises serious legal issues under the phoenix rules and director duties.
• Don’t sign anything with an adviser on the first call. Read before you call anyone and check who you’re dealing with.
• Don’t rely on a promise of a call back from IRD as a pause. Only a written agreement or a court order changes the deadline.

Who should you call first?

Three calls, in this order, usually make sense:

1. Your lawyer, to confirm the dates and whether there’s any basis to dispute the demand.
2. Your accountant, to check the figures and whether the business is viable.
3. A funder, to find out quickly whether the debt can be paid in full.

An insolvency practitioner may be the right person if the business genuinely can’t continue. But if it can, a liquidator isn’t the place to start. Our guide to your next 15 working days sets out a day-by-day plan.

What documents should you pull together now?

Speed depends on paperwork. In the first two days, gather:

• the statutory demand itself and the envelope or email it came in;
• your myIR statement of account, broken down by tax type and period;
• the last three to six months of business bank statements;
• the latest financial statements or management accounts;
• details of any property that could be offered as security, including who owns it and what’s owed on it; and
• a short list of other creditors and any other legal letters.

With these in hand, a lawyer, an accountant and a funder can each give you a reliable answer within a day or two, rather than a week.

Act inside the window

If your company has been served an IRD statutory demand, send us the details now. Asking doesn’t involve a credit check, your enquiry stays with our team instead of being forwarded around, and a real person will call you, usually the same business day. Please include the service date, the amount and any property you own, as precisely as you can, so we can tell you quickly whether funding can clear the demand in time.