As a business owner, if your company is unable to pay creditors and is in financial distress, it may be trading insolvent. If that is the case, a company director may be sued personally and you may be at risk by allowing the company to continue to trade.
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Directors and shareholders of an insolvent company should consider appointing a registered liquidator to wind up a company. If you want to understand the liquidation process, feel free to contact The Insolvency Experts 24 hours a day on 1300 767 525.
Directors and shareholders can appoint a liquidator of their choice in a creditors voluntary liquidation. However, once winding up proceedings have been commenced, the Court will decide who should be appointed liquidator. Usually, it is the choice of the applicant creditor.
The Insolvency Experts provide a low-cost liquidation service, particularly suited to small and medium sized businesses, Australia-wide.
The answer is:
To place a company into liquidation can be done within a day. It is a straightforward process where we prepare all the necessary ASIC forms etc and simply require your signature.
Once those forms are returned, together with a listing of the outstanding creditor claims and company’s assets, the liquidation can commence.
Once the Company is in liquidation, we will generally complete a straightforward liquidation within 3 – 4 months. And that is quick!
The reason why a liquidation takes time is that a liquidator is required, upon appointment to communicate with employees, creditors the ATO and other creditors including secured creditors, the banks, utility providers etc. Further, a liquidator is required to collect the available books and records of the Company and undertake an investigation in order to explain to creditors, and the ASIC, the reasons for the failure.
Following those investigations, a Registered Liquidator is required to prepare, issue and lodge a Statutory Report to Creditors that is required within 3 months of the date of a liquidator’s appointment. In addition, a Report is required to be lodged with the Australian Securities and Investments Commission. It is the ASIC that registers a liquidator and to whom the liquidator must answer.
Once the reporting requirements have been satisfied, the liquidator needs to receive authority to complete the winding up process.
Again, at The Insolvency Experts, we try to complete most straightforward liquidations within 3 – 4 months of the liquidator’s appointment.
The speed in which a Company liquidation can be completed is often very important to a Company director and shareholders particularly where they may seek to borrow funds. In this regard, while Company liquidation does not have the negative long term effect that personal bankruptcy would have on an individual, there is no doubt there is some impact of company liquidation on a director’s credit worthiness – but this is usually able to overcome quicker, where the liquidation is finished in a timely manner.
We have over 60 years combined experienced, and are a Registered Company Liquidator by ASIC.
If you need held with Company Liquidation or Voluntary Administration, you should contact The Insolvency Experts anytime on 1300 767 525.
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