When you’re looking to save your business, liquidation is probably not an option that springs to mind for a director. Well here is a surprise – often the best way to save a business is to sell that business out of the old-company and then to liquidate the old company. We don’t save the company, but we do save the business.
During this process there are a lot of tricks and traps that need to be avoided. The golden rule is that any sale of assets, or the business as a whole, is done at a ‘market price’. Also, if the sale is not carried out correctly – and legally – then the directors could have problems in the future with a liquidator, and it may also attract the attention of ASIC (Australian Securities and Investments Commission), or the ATO.
Wherever your company sits in that range, working through the problems is a stressful and worrying time. As a director, you will be dealing with the pressure of not letting down employees, shareholders and creditors while dealing with unfamiliar situations and laws.
The simplest solution is what we call Informal Restructuring – which is where we work with the directors, and some or all of your creditors, to come to a negotiated solution to return your company to financial health. This is done behind-the-scenes and avoids the use of formal appointments (such as Voluntary Administration) and the Courts.
We take the stress and worry out of your financial situation
Being a director of an insolvent company is a stressful and worrying situation. You will be facing pressure from employees, shareholders, the bank and your creditors. At Restructuring Works we know the proven techniques to find the right solution for you. We can:
- Relieve your worry and stress by explaining and guiding you through the simple process of liquidation or by finding another solution
- Help protect you by ensuring you don’t fall foul of the many restructuring traps that can cause directors’ personal liability
What is Voluntary Liquidation?
In the situation where a business is sold out of an insolvent company, the directors then need to consider a Creditors’ Voluntary Liquidation to finalise the affairs of the old company.
A Creditors’ Voluntary Liquidation is a simple process that avoids the involvement of lawyers and the courts. It starts with the directors calling a shareholders’ meeting where the shareholders pass a Special Resolution to wind up the company and to appoint a liquidator.
A meeting of creditors is called for around two weeks after the shareholders meeting.
If you’ve sold the assets of the business then the liquidator will distribute those funds to creditors making sure that creditors are paid in the correct order as dictated by the Corporations Act.
Our office hours are 9am to 5pm Monday to Friday. Outside these hours you can leave a message and we will get back to you on the next business day.