If My Business Is in Trouble Should I Get in Touch With a Liquidator?
You might have been advised by your accountant, lawyer, friends or even family that you ought to contact a liquidator to put your company into liquidation. But before you go forward with this at Bankruptcy Australia we suggest you consider it really carefully. Why? You may assume because you are paying a liquidator, that they will have your best interests at heart. Unfortunately, more often than not this is not the case. Before you do anything call us on 1300 795 575.
Should I Appoint a Liquidator?
If a business owner finds themselves in a financial position where bankruptcy seems an option, they are often encouraged to contact a liquidator to put the company into Voluntary Liquidation. Often, people think a liquidator will protect their best interests, believing that they have paid the liquidator to help them get back on their feet.
Be careful before you turn over your organization to a Liquidator no matter where you are in Australia. It does not matter if your business is in Brisbane, Canberra, Sydney, Melbourne, The Gold Coast, Adelaide, Perth, Darwin, Hobart, The Sunshine Coast, Newcastle or Geelong, entering into liquidation can be extremely costly.
Liquidators Are Not Your Friend.
Liquidators are usually very nice people. However, they have an important role to play when you appoint them to help you with your company. Their duty is to themselves, your creditors (people you owe money to) and the courts; not to you. A liquidator’s goal is to sell assets in order to acquire as much money as possible to pay back your creditors. If you think that you are paying for a friendly liquidator you might want to think again. Be assured that in Australia liquidators are highly regulated and they are not going to bend the rules just for you. The truth unfortunately, is that you do not factor into the equation, a liquidator’s primary job is to focus on paying themselves and after that with what is left repay creditors, and that’s it! At the end of the day, liquidators are not your friends. Call us at Bankruptcy Australia on 1300 795 575 BEFORE you appoint a liquidator.
Are on Your Side
At Bankruptcy Australia we will help you weigh up the advantages and disadvantages of putting your company into liquidation. There are a few common questions we get asked about liquidation that we should probably clear up;
Can’t I simply liquidate my company because I want to protect myself personally from my creditors and potential bankruptcy?
Beware! Here is the real truth. Most business owners have multiple business debts secured with personal guarantees such as equipment loans, accounts with suppliers, rent to the landlord and the standard bank loans and overdrafts. When the Company has been liquidated these creditors will simply pursue you personally for any outstanding debt.
I want to appoint my own liquidator so I keep control?
The minute you hand the liquidator the legal keys to your business you have lost 100% of the control. A liquidator has complete control over every aspect of your business – the assets, bank accounts, and even your customers. The liquidators become the new directors of your company and can do with it as they please. A liquidator’s duty is entirely to themselves and your business’s creditors.
I don’t want to lose my house so liquidation will protect my personal assets, right?
Unfortunately No! There are no guarantees in this regard at all. There are lots of situations where a liquidator will be required to come after you personally once you are in liquidation, some examples are Insolvent trading, preference payments and director’s loans.
There are lots of ways liquidators can come after your individual assets so be careful, get the right advice. If you are concerned about this or anything to do with liquidating your business call Bankruptcy Australia on 1300 795 575.
Big 5 Questions
– Is Going Bankrupt Right for me?
– Will I lose my job?
– How will my income be affected?
– Can I keep my house or car?
– Will I lose my business or can I still be self-employed?
If you are considering bankruptcy, being able to answer these questions is vital. Then you’ll know exactly what will happen to your business and assets should you choose to file for bankruptcy. Feel free to download our eBook for free and inform yourself today. Or, if your questions are more complex, call us directly on 1300 795 575.
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When the bank wouldn’t lend me any more money against the farm, I knew I was in trouble. The thought of losing the home, which had been in our family for many years, was just too much. My bookkeeper and financial advisor suggested I speak to Bankruptcy Experts, which I didn’t do. As I was in such significant debt, I spoke to a liquidation firm who advised that liquidation was my only way out. My accountant even said that as I am paying the liquidator, and I was going into voluntary liquidation, that I would be looked after. This was not the case.
I spoke to some liquidators who seemed very capable and professional. They advised they would help me as much as possible to work through my money problems. It felt like they knew what I was going through and that I could trust that they would take care of me.
When I signed the paperwork to assign the liquidators, everything was out of my hands. They asked for the keys to my equipment and the home and everything was taken over. The money I had coming in was gone, the sale of my equipment was taken over and everything was gone. Even my savings account was frozen the next day. What I thought was going to be a way out of my problems ended up being a huge nightmare. I lost everything.
What Is the Best Strategy If My Business Is in Difficulty?
One of the best things you can do in this circumstance is to be prepared. In Australia there are many things to think about, before surrendering your business to a liquidator so it is best to call us. Corporate Insolvency is a complex matter, surrounded by numerous rules and regulations. At Bankruptcy Australia, we can lead you through the crazy confusion. Call us on 1300 795 575 so we can help you to get clear on your options, so you can make the right decisions for you.
What If Someone Else Is Winding Up my Company?
If the ATO or a creditor is ‘winding up’ your business, that means they have actually appointed a liquidator through the courts to carry this out. However you still may have options, ensure you safeguard yourself by knowing exactly where you stand. The sooner you speak with us at Bankruptcy Australia, the sooner we can help. If you have already received a court order, do not wait one second more, call us on 1300 795 575.
Can I Continue to Run a Business If I Have Been the Director of a Company That Has Been Liquidated?
Liquidation does not have to mean your business days are over. We can help to guide you into your brand-new life, after liquidation. If you ﬁle for bankruptcy then you are disqualiﬁed from being a director for the 3 years you are bankrupt, however this is usually not the case with liquidation. At Bankruptcy Australia we are experts at Business Re-Structuring and Business Turnaround. Do not hesitate to get in touch with us on 1300 795 575 and we will help you to work out your new company strategy.
What Do We Do?
One of the key things we do at Bankruptcy Australia is we analyse your needs and work through your alternatives. We then help to direct you through those options so you can make the best choices for you. We want to work with you so that you can get the best possible company outcome and all the while safeguarding you personally as best we can.
At Bankruptcy Australia we also ensure any communication with your creditors is handled in the proper way. Ultimately, our job is to help you to fix this unpleasant situation as easily as possible. Call us now at Bankruptcy Australia on 1300 795 575.
What If I Have an ATO Debt?
The ATO normally issues companies with ‘Wind-Up’ notices, Statutory Demands, or even a Director’s Penalty Notice. If you receive one of these, take it seriously. The best thing you can do is to act quickly. Through prompt communication and a clear understanding of the situation, the very best outcomes can be achieved for all involved. No matter what is required, at Bankruptcy Australia we can help, we will work through your options with you to help you develop a plan, then support you along the way.
ATO – DIRECTOR’S PENALTY NOTICE
Directors Be Warned
As a business owner or business director it is essential to understand the repercussions of trading insolvently. There are very serious consequences and you should understand how trading insolvently can, and will impact you and your business. If you have a tax debt then you might be issued with a Director’s Penalty Notice by the ATO, you never ever know when you might be sent out one, it might come at any time.
What Does It Mean If I Have a Director’s Penalty Notice?
A Director’s Penalty Notice has the aim of making the Director liable for the company’s unpaid tax debt. If the debt is older than 3 months and or the debt was not reported to the ATO within 3 months of the due date, as the director, you will not be able to avoid personal liability for a PAYG ATO debt, which comes with a Director’s Penalty Notice. You may also be liable for your company’s unpaid superannuation liability and a new personal income tax liability (which will make directors and their associates responsible for a company’s unpaid PAYG withholding liability).
Do I Have Any Choices?
There are options. If the company has an ATO debt or you’ve received a Director’s Penalty Notice, it is important to get specialist guidance. To ﬁnd out all of your options, call Bankruptcy Australia now on 1300 795 575.
What Is a Statutory Demand?
A Statutory Demand is a demand produced under 459E of the Corporations Act. This particular document is issued by the Court. A Statutory Demand asks that the Debtor Company pay a speciﬁed sum of money within 21 days from the date of the request. If you receive a Statutory Demand seek immediate independent legal advice. Any applications to the court to contest the notice MUST be made inside 21 days.
What If the Statutory Demand Expires Unsatisfied?
Section 95 (A) of the Corporations Act states that a company is solvent if it is able to pay it’s debts when due. Under section 459C of the Act, the business is presumed to be insolvent if it has failed to comply with a Statutory Demand. The creditor may then apply to the court to appoint a liquidator to the debtor company.
Can the Statutory Demand Just Turn up in the Post?
Yes, it might be delivered face-to-face or simply appear in the post as registered mail.
WINDING UP NOTICE
What is a Wind-Up Notice?
- A Wind-Up Notice will follow a Statutory Demand and is a letter to let you know that if you don’t pay your debts by a particular date a liquidator will be appointed by the courts to take over your company.
- If that date passes without the debt being resolved a liquidator will then be appointed who will turn the business’s assets into cash..
- The cash is then distributed to creditors and associated parties in the order set out by the Corporations Act.
Will I Be Personally Obligated For my Business’s Debt?
The liquidation of a business does not automatically imply the director’s responsibility. The process of winding-up a company is similar to the process of having a person declared bankrupt. The ATO can issue a Director’s Penalty Notice at any time however, so it is best to act rapidly. For a complimentary consultation, contact Bankruptcy Australia on 1300 795 575.
What Happens If I Cannot Pay the Debt Within the 21 Days?
If you cannot or do not pay within the 21 days, then a liquidator will be appointed. At this point, you cease to be the director of your company. The court-appointed liquidator takes full control of the business, and all the business assets will be sold.
Do I Have any Options Prior to the Liquidators Seizing My Business?
You do still have options. We can explain everything to you clearly during our free initial consultation, and work through the problem with you. Our team of professionals know all the ins and outs of bankruptcy law and will spare you huge amounts of stress 1300 795 575.