An insolvent company is one that is unable to pay its debts when they fall due for payment. The three most common corporate insolvency procedures are: voluntary administration, liquidation and receivership.
Insolvent trading is the law under the Corporations Act section 588G that says that if a company is insolvent and a director allows the company to incur a new debt, then the director can be personally liable for the new debts incurred.
My company is in liquidation. Is bankruptcy the next step?mayfieldinsolvency2020-11-14T16:09:01+02:00
While bankruptcy can result once a company is in liquidation, it isn’t always the case. However, it is more likely if you have personally guaranteed the debts that are owed by the company. In this situation, creditors may reserve their right to recover the debt from you personally. The liquidator may also pursue you for a settlement in the event you were trading the company while it was insolvent or if you breached any laws.
Can I set up a new company and be a director if I’ve recently placed a company into liquidation?mayfieldinsolvency2020-11-14T16:08:32+02:00
You will need to seek tax advice as to how this situation will affect you. Liquidators that are appointed by the court are not required to keep shareholders updated on the status or outcome of the liquidation.
When is a company director liable for the debts of the company?mayfieldinsolvency2020-11-14T16:06:44+02:00
The company director is usually not liable for the company’s debts unless they have personally guaranteed debts, have an expired Director Penalty Notice from the Taxation Office (prior to when an administrator has been appointed), they have been found guilty of insolvent trading, or owe certain personal liabilities.
I am owed money but the person has gone bankrupt. Does this mean I won’t get paid what is owed?mayfieldinsolvency2020-11-14T16:05:59+02:00
This depends on the amount of money that can be obtained from the trustee in bankruptcy who is selling the bankrupt’s assets and from any cash amounts the bankrupt holds. Often you will just be paid a percentage of what is available if there is insufficient money to pay all creditors.
What can I do if I have a winding up order against my company?mayfieldinsolvency2020-11-14T16:05:01+02:00
Winding up is a process where a company’s outstanding matters are finalised, its assets are liquidated and it ceases to exist as a company. If you have received a winding up order, then ideally you should pay the debt or prove that you are solvent to the courts and creditors.
One of my creditors is threatening legal action against my company but my bank is refusing to grant any more credit. What can I do?mayfieldinsolvency2020-11-14T16:04:20+02:00
The company director is required to cooperate with the liquidator during the insolvency process by promptly completing their Report as to Affairs form and providing all required company books and records.
What type of businesses does Kingsgate Insolvency assist?mayfieldinsolvency2020-11-14T16:02:52+02:00
We work with most businesses, particularly small-to-medium sized enterprises across all sectors. Because of our nationwide presence, we can work with companies in any geographical location. For further information and confidential advice, please contact us