Liquidation

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If My Business Is in Trouble Should I Get in Touch With a Liquidator?

You might have been advised by your bookkeeper, solicitor, friends or even family that you ought to get in touch with a liquidator to put your company into liquidation. But before you go forward with this at Bankruptcy Experts Bendigo we suggest you consider it really carefully. Why? You might presume because you are paying a liquidator, that they will have your best interests at heart. Regrettably, most of the time this is not the case. Before you do anything call us on 1300 795 575.

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Should I Appoint a Liquidator?

If a business owner finds themselves in a financial position where bankruptcy seems an option, they are frequently encouraged to contact a liquidator to put the company into Voluntary Liquidation. Often, people believe a liquidator will take care of their best interests, believing that they have paid the liquidator to help them get back on their feet.

Take care before you hand 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, going into liquidation can be very costly.

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Liquidators Are Not Your Friend.

Liquidators are often very nice people. However, they have an essential role to play when you appoint them to help you with your company. Their responsibility is to themselves, your creditors (people you owe money to) and the courts; not to you. A liquidator’s aim is to sell assets in order to acquire as much money as possible to pay back your creditors. If you believe that you are paying for a friendly liquidator you might wish to think again. Be assured that in Victoria 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 then with what is left pay back creditors, and that’s it! At the end of the day, liquidators are not your friends. Call us at Bankruptcy Experts Bendigo on 1300 795 575 BEFORE you appoint a liquidator.

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Bankruptcy Experts Bendigo
Are on Your Side

At Bankruptcy Experts Bendigo we will help you weigh up the pros and cons of putting your company into liquidation. There are a couple of common questions we get asked about liquidation that we should probably clarify;

Can’t I simply liquidate my company because I want to protect myself personally from my creditors and potential bankruptcy?
Beware! Here is the reality. A lot of 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 company – the assets, bank accounts, and even your customers. The liquidators become the new directors of your business and can do with it as they please. A liquidator’s obligation is solely to themselves and the business’s creditors.

I don’t want to lose my house so liquidation will protect my personal assets, right?
Sadly No! There are no guarantees in this regard at all. There are many 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 take care, get the right advice. If you are worried about this or anything to do with liquidating your business call Bankruptcy Experts Bendigo on 1300 795 575.

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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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One Business
Owner’s
Story

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 Victoria 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 complicated matter, surrounded by numerous rules and regulations. At Bankruptcy Experts Bendigo, we can lead you through the crazy confusion. Call us on 1300 795 575so we can help you to get clear on your options, so you can make the right decisions for you.

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What If Someone Else Is Winding Up my Company?

If the ATO or a creditor is ‘winding up’ your company, that means they have actually appointed a liquidator through the courts to carry this out. However you still may have options, ensure you protect yourself by understanding exactly where you stand. The earlier you talk to us at Bankruptcy Experts Bendigo, the earlier we can help. If you have received a court order, do not wait one second more, call us on 1300 795 575.

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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, but this is generally not the case with liquidation. At Bankruptcy Experts Bendigo we are specialists at Business Re-Structuring and Business Turnaround. Feel free to contact us on 1300 795 575 and we will help you to work out your new business strategy.

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What Do We Do?

One of the key things we do at Bankruptcy Experts Bendigo is we evaluate your needs and work through your alternatives. We then help to direct you through those options so you can make the right choices for you. We want to work with you so that you can get the best possible business outcome and all the while safeguarding you personally as best we can.

At Bankruptcy Experts Bendigo we also ensure any communication with your creditors is managed in the right way. Ultimately, our job is to help you to resolve this uncomfortable situation as easily as possible. Call us now at Bankruptcy Experts Bendigo 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 get one of these, take it seriously. The best thing you can do is to act swiftly. 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 Experts Bendigo we can help, we will work through your choices with you to help you develop a strategy, then support you along the way.

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ATO – DIRECTOR’S PENALTY NOTICE

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Directors Be Warned

As a business owner or company director it is very important to understand the consequences of trading insolvently. There are quite serious consequences and you should understand how trading insolvently can, and will impact you and your company. If you have a tax debt then you may be issued with a Director’s Penalty Notice by the ATO, you never know when you might be sent out one, it could come at any time.

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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).

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Do I Have Any Choices?

There are options. If the business has an ATO debt or you’ve received a Director’s Penalty Notice, it is essential to get specialist advice. To find out all of your options, call Bankruptcy Experts Bendigo now on 1300 795 575.

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STATUTORY DEMANDS

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 amount 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.

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What If the Statutory Demand Expires Unsatisfied?

Section 95 (A) of the Corporations Act specifies that a business is solvent if it has the ability to pay it’s debts when due. Under section 459C of the Act, the business is assumed 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.

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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

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What is a Wind-Up Notice?

 

  • A Wind-Up Notice will follow a Statutory Demand and is a letter to let you understand that if you do not pay your debts by a particular date a liquidator will be appointed by the courts to take control of your company.
  • If that date is passes without the debt being resolved a liquidator will then be appointed who will turn the business’s assets into cash.
  • The money is then distributed to creditors and associated parties in the order set out by the Corporations Act.
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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 quickly. For a complimentary consultation, contact Bankruptcy Experts Bendigo on 1300 795 575.

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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 business. The court-appointed liquidator takes complete control of the business, and all 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.

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