 A dispute with my co-director is threatening the viability of the company’s business. What are the alternatives? |
You should seek legal or other professional advice immediately as disputes of this nature can be very costly for all parties both financially and personally, and Court proceedings should be a last resort. To ensure the viability of the business is not affected, focus on the core business needs to be maintained while a solution is brokered between the disputing parties. Appointing an independent person that has the expertise to both manage the business if required and provide real solutions to resolve a dispute should be considered depending on the circumstances. Please contact our team for further assistance. |
| Can I lose my house if the company is placed into liquidation or some other external administration? |
If your house is security for loans given to the company and /or you service a loan secured on your house from income you receive from your company, your house may be at risk. |
| How can I find out more about different types of insolvency appointments? |
We would need to know a bit more detail in order to answer this question fully. Please contact our team to help you further. |
| How can I minimise the risk of personal liability as a Director? |
Avoid signing personal guarantees and ensure you have adequate Directors and Officers' liability insurance are two major strategies. ASIC explains your duties as a Director. Also, at the time of incurring a debt you must ensure that your company has the financial means to pay the debts incurred as and when those debts fall due for payment. Contact our team for more information. |
| How do I appoint a Liquidator or an Administrator to my company? |
It can be a relatively straight forward procedure and could be undertaken within a day or two depending on the number of Directors and shareholders involved. Please contact our team for further details. |
| I have given personal guarantees for the company’s debts. What can happen when the company is placed into liquidation or some other external administration? |
In a liquidation scenario, the beneficiary of the personal guarantee can demand payment of the company’s debt from you. While a company is in voluntary administration, the beneficiary of the personal guarantee cannot enforce against the guarantor except with leave of the Court. Contact our team for more information. |
| I have received a Director’s penalty notice from the ATO. What are the consequences of not complying with it? |
You will become personally liable for the company’s tax debt claimed in the notice. You must act urgently and within the 14 day period from the date of the notice. You should seek legal or other professional advice immediately. Contact our team for more information. |
| I want to continue trading as I believe my company can trade out of its financial difficulties but how can I achieve a moratorium from creditor claims? |
There are a number of methods to obtain a moratorium from creditor claims to give your company breathing space to implement a turnaround plan. A business can be rescued if a Director acts quickly and seeks professional advice from a skilled reconstruction or insolvency specialist. Should you wish to seek cost effective advice and solutions, contact our team of insolvency specialists. |
| If my company goes into liquidation, am I allowed to start a new company? |
Yes. There is nothing preventing a Director from starting a new company as long as the Director is not prevented from being a Director by virtue of provisions of the Insolvency Act. |
| If the company goes into liquidation, will I be able to purchase either the business or assets from the liquidator? |
The liquidator has a duty to get the best possible price for assets of the company for the benefit of creditors. There is nothing preventing a Director from making an offer for the purchase of the business or assets, however the price would be required to be at market value. |
| My company acts as a trustee of a trust, what happens when an external administrator is appointed to the company? |
A trust deed may contain provisions that are triggered on the appointment of an external administrator which may have serious implications for the success of the appointment. You should seek legal or other professional advice immediately. |
| My company has received a statutory demand. What are the consequences of not complying with it? |
Failure to comply with a statutory demand could result in Court Proceedings being filed to wind up your company. You should seek legal advice or other professional advice immediately. Our team are not lawyers, however we can provide strategic professional advice tailored to your individual needs. Please contact our team for further assistance. |
| My company is insolvent and my employees are due money from the company. What happens if I pay them out of my own pocket? |
Employees are entitled to receive their arrears of wages and other entitlements from the GEERS scheme managed by the DEEWR once the company goes into liquidation. If you, as a Director pay the wages, you are entitled to ‘stand in their shoes’ in respect of any dividend paid by the liquidator, however you will not be able to submit a claim to GEERS for monies paid to employees by you. |
| What are my duties as a Director if my company is or might be insolvent? |
Please refer to the ASIC website which answers the questions "What are my duties as a Director?" |
| What are the usual warning signs or indicators of insolvency? |
Please refer to the ASIC website which answers the question "Is my company in financial difficulty?" |
| What do I do if I suspect my company is in financial difficulty? |
If you suspect your company is in financial difficulty, you should seek proper accounting and legal advice as early as possible as this increases the likelihood of the company surviving. To complete a quick solvency check, please visit our Insolvency Check List. Alternatively, please contact our team for a confidential discussion. |
| What happens if I do not submit a Report As To Affairs (“RATA”) to the Liquidator or any other information I am requested to provide? |
The Corporations Act 2001 states that you must provide the Liquidator with a RATA when requested. If you fail to do this, the Liquidator is required to report this to ASIC. You may be liable for a fine or imprisonment if you do not provide the Liquidator with a RATA or any other documentation requested by him/her. |
| Where can I find further information? |
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