Lowest Cost Liquidation
A Creditors Voluntary Liquidation with The Insolvency Experts is a quick and inexpensive way of dealing with an insolvent company and ending the stress associated with continual creditor calls.
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Lowest Cost Liquidation
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Company Liquidation Can Be Beneficial
A “Creditors’ Voluntary Liquidation” is for an insolvent company that is unable to pay its debts. Liquidation is often the best option as it:
- Helps end the stress and worry caused by continual creditor calls
- Focuses creditor attention on the Liquidator and not the director
- Helps protect a director from Insolvent Trading
- Helps protect a director from Personal Liability for unpaid tax liabilities – see the Director Penalty page
As soon as we are appointed, we contact the creditors, advise them the company has been placed into liquidation, and from that point on, creditors direct all queries about the company to us – and not the director.
The role of the liquidator in a Creditors Voluntary Liquidation
The Liquidator will;
- Take control of, and realise the assets of the insolvent company
- Distribute available funds to proven creditors
- Investigate the affairs of the company
- Report to ASIC any issues found through the investigation process
- Consider various legal actions against debtors, creditors and others
The effect of a Creditors’ Voluntary liquidation?
When a liquidator is appointed, the directors powers are immediately suspended.
The liquidator takes control of the company and reports to the creditors and the ASIC. The directors are obliged to assist the Liquidator in the winding up process.
Once appointed, the liquidator will take control of, and sell the remaining assets as well as undertake an investigation in order to explain the reasons for the company’s failure.
What is expected of directors in a Creditors Voluntary Liquidation?
Directors are required by law to assist the liquidator. In this regard, the liquidator may require a director to provide:
- details of all the assets and liabilities of the company at the date of liquidation
- all the company’s books and records
- explanations of transactions of the company
- explanations of the use of company funds or property
If the Liquidator believes there has been any breaches of the Corporations Act, he will report to the ASIC and the creditors who will consider the appropriate course of action in the circumstances.
Liquidation need not be a traumatic experience. If you are considering liquidation, talk to us. We’ll provide honest advice and information about your situation at no cost and without obligation.
Investigations in a Creditors’ Voluntary Liquidation
A liquidator’s investigations will determine whether:
- there has been a breach of the Corporations Act;
- the company entered into any transactions that may be voidable or able to be overturned for the benefit of creditors
- the company traded while insolvent
- company funds or assets have been misused
- there are any unreasonable or uncommercial transactions that can be recovered.
There is no set time frame to complete a liquidation however The Insolvency Experts usually try to complete a simple liquidation within 6 to 8 months. Occasionally , if a matter is complex, a liquidation may take longer than this.
The time it takes to complete a liquidation depends upon whether;
- any legal actions are commenced – say for the recovery of debts
- there is an attempt to recover unfair preferences, unreasonable or uncommercial transactions
- the ASIC has given clearance for the matter to be finalised.
While a liquidation may take a number of months to complete, directors will usually have very little involvement in the process.
Your Questions Answered
Does a Liquidation affect credit rating?
Yes – but the effect is nothing like the severity of personal bankruptcy.
Will creditors stop calling me after liquidation?
Generally yes. As soon as the company is placed into liquidation, we contact the creditors and advise them of our appointment. The focus is now on the liquidator and not the director. The only exception to this is where a director has signed a personal guarantee.
How long does it take to place a company into liquidation?
We can place your company into liquidation in only a few hours, if needed. Call us today. We are the Lowest Cost Liquidation specialists in Australia.