Placing an insolvent company into liquidation in Australia is a simple and relatively inexpensive process that requires 3 basic steps;
- Select a liquidator; then
- pass a directors’ resolution that the company is insolvent and call a meeting of shareholders; then
- the shareholders should resolve to appoint a liquidator – this resolution must be passed by a 75% majority of members
While the process of placing a company into liquidation is simple, deciding on whether liquidation is appropriate or not is far more complex.
The best way in which directors can decide on whether liquidation is appropriate is to obtain honest and competent advice from a licensed and registered professional.
The Insolvency Experts are licensed and Registered Liquidators and can be called 24 hours a day on 1300 767 525.
What happens when you liquidate a company in Australia?
When a company is placed into liquidation, the powers of the director are immediately suspended and the Liquidator takes full control of the company and any business and/or assets. See the powers of a Liquidator at Section 477 of the Corporations Act.
Apart from taking control of the assets, the liquidator is required to perform a detailed investigation into the failure of the company.
During this process;
- directors are required to assist the Liquidator’s investigations by providing books and records and assisting with the liquidators reasonable requests for assistance.
- At the conclusion of the investigation process, the Liquidator must report to the ASIC and to the creditors.
Do not liquidate a company until you understand the potential impact on you
Liquidation is only one of many options that must be considered.
Is liquidation really the best step for your company? Are there alternatives?
The Insolvency Experts will explain the risks and benefits of company liquidation. Find out which strategy is best by calling The Insolvency Experts today.