It is unfortunate that sometimes a company is just not viable. If the company is trading at a loss and there are no reasonable prospects for the company to trade at a profit then there is really only the option of liquidation.
Don’t be too pessimistic about your company’s prospects. It is always possible that when our experts examine the financial position of the company they may be able to identify a viable part of the business. If so, we can use a Voluntary Administration to bring the business back to the profitable core. So always give us a call before giving up hope.
But liquidation will sometimes be the best thing for the directors to liquidate the company. The advantages are that it:
- removes the worry and stress of the directors as the management of the liquidation is passed to the liquidator;
- removes the threat of directors personal liability under trading while insolvent legislation or if a Directors Penalty Notice has been served on the directors.
We normally recommend a Creditors Voluntary Liquidation. With the help of an insolvency practitioner, the Directors will call an extraordinary general meeting of the company for shareholders to pass a Special Resolution to wind up the company and to nominate a liquidator. A meeting of creditors is then called and the creditors can appoint a liquidator of their own choosing.
Recent amendments to the Corporations Act have reduced the notice period required to place a company into liquidation by Creditors Voluntary Liquidation. The process of the winding up once the liquidator has been appointed is similar to that of a Court Liquidation. The liquidator’s role is to realise the assets of the company and to distribute those proceeds in accordance with the provisions of the Corporations Act.
Because Restructuring Works is on the outside looking in we can often see possibilities that you cannot. We are experts at using the law to restructure companies so call us and discuss liquidation versus Voluntary Administration.
Clearly, if the company has decided to liquidate, we can help you with the process quickly and with understanding. One of our experts can start the Creditors Voluntary Liquidation process for you today. CONTACT US for CONFIDENTIAL FREE ADVICE.