Company debt can happen very easily. A few slow months and all of a sudden the debt is substantially beyond the reach of the company owner. If you have company debts that are out of reach then give us a phone call. At Bankruptcy Experts Albury we are company debt specialists. For a free consultation contact 1300 795 575.
Frequently when a business owner finds him or herself in an unfeasible financial position they are instructed by either their accountant, their solicitor or even their friends to contact a liquidator and place the business into liquidation. Be cautious about this, as the belief is that because you are paying the liquidator they will look after your best interests and help you to get back on your feet. BUT THIS IS DEFINITELY NOT THE CASE!
Although liquidators, administrators and receivers are usually nice people, their obligation, once they are appointed, is to your creditors (people you owe money to) and to the courts. They are to collect as much money as possible from the liquidated company to pay off these creditors. That’s it. If for one minute you feel they will look after your best interests, you are sadly misguided.
Once you have signed those papers to appoint the liquidator to your company, that is it! You no longer have any authority over the company. The liquidator will do whatever they feel is in the best interests of the creditors and, guess what, in many cases you have just paid for the death of your own company.
I knew I was in strife when the credit union wouldn’t lend me any more against the farm. This farm has been in the family for ages and the thought of losing it was way too much. I called my financial advisor and my solicitor, and they both recommended me to get a liquidator. They said that’s the only way out. I knew I had substantial debt, but it just seemed like I had no options. My bookkeeper said that because I am paying for the liquidator and that it was going to be a voluntary liquidation that I would be protected. WRONG!
I found some liquidators. They seemed nice and knowledgeable and they said they would help me as much as they could to work through my financial problems. I had no idea what was about to happen. They seemed to appreciate my dilemma; I had some cash coming in and a sale of some equipment going through.
The minute I signed the documents the liquidator asked for the keys and that was it. Everything was taken out of my hands, the sale of the equipment was totally taken over, the money I had coming in was gone, they took over everything; it was all gone. The next day my bank accounts were frozen and what I thought was going to be a beneficial situation turned out to be my worst nightmare. I lost everything!
What is the best plan of action if my business is in trouble?
There is a trick to dealing with this process: PREPARATION. There is a lot you can do to prepare yourself before you surrender the control of your company to a liquidator. In fact, most of the worry can be handled in a way that will work for you, not against you. This sounds simple but in fact there is an extensive amount of regulation and many rules in place surrounding this procedure, so always get some advice about this. If you are unsure what you should do and just need some suggestions, just give us a call on 1300 795 575.Bankruptcy Experts Albury specialises in pre-liquidation strategies.
If someone is winding up your business like the ATO or a creditor, they will have a liquidator appointed by the courts. You do have some options here, and there is lots you must know and do to protect yourself. The key here is to get some advice, and involve us as soon as you can in this process. It is that simple. Typically you will receive a notice in the mail or a court order, and if you have one of these give us a call because the longer you disregard this the less options you have. Call us at 1300 795 575.
Yes, you can continue to run a business. No, you can not still be the director of the company. This is one of the most common questions we are asked. Of course there are regulations that need to be adhered to, and you need to ensure you structure things the right way moving forward. Liquidation does not need to be the end of your business life, as so many people think it is. We can help you do this and restore a new life after liquidation. There are choices, but in most cases people simply don’t know what they are. At Bankruptcy Experts Albury we can explain your choices and help you achieve your goals.
Be prepared. Liquidators don’t work for you no matter how much you pay them. Your creditors don’t work for you no matter how much of their bill you pay them. Your friends love you but usually have no idea what they are recommending to you. They’ve probably heard that if you want to begin again you need to get rid of the company through a liquidator, and it is an easy assumption to make that if you pay a liquidator they will work for you. Please note, THIS IS NOT THE CASE! WE WORK FOR YOU– no one else does. You are our client and we are only interested in getting the result you want. For a free consultation call 1300 795 575.
At Bankruptcy Experts Albury we help you work through your choices. We then help you take the most suitable action. Then we work toward attaining the best possible outcome for you and protecting whatever we can. We communicate the right way with your creditors and the liquidator, if required.
If you have a tax debt, don’t ignore your mail! The ATO will often issue companies Wind-Up Notices or Statutory Demands, or even a Director’s Penalty Notice on you or your company. If this is the case, you must act now! Sometimes communication is all that’s required, sometimes winding up the company is the answer and sometimes negotiation is required. Whatever is required, we will help you work through a plan, and we support you the entire way.
If you have received one of these notices YOU MUST NOT ALLOW THEM LAPSE. Call us as early as you receive them and we will assist you work through the processes readily available to get the most effective and most favorable result for you. Once we have done an assessment of your business and the situation we suggest an action plan, then it is your decision whether you go ahead from there. Call Bankruptcy Experts Albury for a free consultation today at 1300 795 575.
What is critically important is that every business owner understands these changes and the serious nature of them and how they will impact you and your business. If you have a tax debt then you may be issued with a Director Penalty Notice by the ATO.
The purpose of a Director Penalty Notice is to make directors personally liable for their company’s unpaid tax debt. As a director, you will no longer have the ability to avoid personal liability for a PAYG tax debt, which includes a Director Penalty Notice, if the following applies:
Yes. If your company has an ATO debt or you have received a Director Penalty Notice, it is necessary that you secure professional advice, as we have a variety of options you may wish to consider. Simply call us on 1300 795 575.
There might be significant consequences for not following the tax office’s notice; this can include losing personal assets such as cars, property or shares, and personal bankruptcy for the company’s debts. In other words, the ATO will personally bankrupt you.
A Statutory Demand is a demand created under 459E of the Corporations Act. This document is not issued by the Court. A Statutory Demand requires that the Debtor Company pay a specified sum of money within 21 days from the date of the delivery of the demand on the Debtor Company.
If the debt is disputed or if there are irregularities in the document, the company should immediately look for independent legal advice and apply to the Court to set the demand aside on the grounds that the debt, then the subject of the Statutory Demand is genuinely questioned. This application MUST be made within 21 days.
Section 95(A) of the Corporations Act provides that a company is solvent if it has the ability to pay its debts as and when they fall due. Accordingly, the test as to whether or not a company is insolvent is that it is unable to pay its debts as and when they fall due.
Under Section 459C of the Act, the company is presumed to be insolvent if a company has failed to comply with a Statutory Demand. Then, the delivery to a Debtor Company and non-compliance with the Statutory Demand will provide “proof,” which is sufficient for a creditor to apply to the Court for the appointment of a liquidator to the company.
Yes, it may be delivered personally or simply turn up in the post as registered post.
A wind-up notice typically follows a Statutory Demand. If a company is unable to pay its debts then the Court has the power to wind it up and appoint a liquidator whose responsibility it is to turn the assets into cash and disburse the cash in the order set out in the Corporations Act. In other words, this notice is essentially a letter telling you that on a specific date a liquidator will be appointed by the courts to take over your company if you can’t pay the debt.
The creditor who obtains the appointment of the liquidator and the liquidator take priority in regard to their expenses as do specific employee entitlements. The rest is distributed equally between unsecured creditors.
No. The liquidation of a company does not automatically suggest the director will be made bankrupt; however, the process of winding up a company is similar to the process of having a person declared bankrupt. Having said that, the ATO can serve a Director’s Penalty Notice at any time, so it’s best to act immediately. For a free consultation contact us on 1300 795 575.
A liquidator will be appointed and you will no longer be the director of your company. The court will assign a liquidator who then assumes full control of your business. All of the customers, bank accounts, assets, cash, money that’s owed to the company and your premises are no longer yours. Simply put, it’s over. The company you have built for many years is no longer yours. All the assets will be sold, your business, shop or factory will be taken over by the liquidator (they will even change the locks) and your services are no longer needed. Every facet of your company will now be under the management of the liquidator.
Yes. We offer a free initial consultation to help you work through this dilemma. Our team of professionals can spare you tremendous misery. You must act swiftly! Contacting us the day before the liquidator turns up is meaningless. Get in touch with Bankruptcy Experts Albury today on 1300 795 575.
No. The company is no longer in your control.