- Continued losses
- Stressed cash flow
- Overdue Tax lodgements and payments
- Overdue payment for the Employees’ Superannuation
- overdraft limit reached or defaults on loan or interest payments
- Creditors are not paid within their normal credit terms
- Special arrangements with selected creditors
- suppliers placing your company on cash-on-delivery (COD) terms
- solicitors’ letters, demands, summonses, judgements or warrants issued against your company
- Inability to produce timely and accurate financial information to display the Company’s trading performance and financial position, and make reliable forecasts.
Can I Still Be A Director For Another Company?
If one of your company has been placed into Liquidation and of which you are a Director, it does not prevent you from being a director of other Companies.
However, if you have been made personal bankruptcy, you are automatically disqualified to be a director of any company.
What Are The Director’s Responsibility After The Company Is Placed Into Liquidation?
Once the Company is in Liquidation, the Liquidator will take over the affairs of the Company, the Director is required to cooperate with the Liquidator by providing information and Company’s books and records.
The Liquidator is obligated to report the Director to Australian Securities and Investments Commission (ASIC) if the Director did not assist the Liquidator as requested.
What Is Director’s Penalty Notice?
A Director Penalty Notice (DPN) is a notice that the Australian Tax Office (ATO) sends a Director to hold them personally liable for the company’s unpaid tax liabilities for PAYG and SGC.
To avoid being personal liable for the unpaid PAYG and SGC when receiving a DPN, the Company is required to lodge their Business Activity Statement and Superannuation Contribution Statement no later than three (3) months after the due date.
What Is Insolvent Trading?
The Director is personal liable for the debt incurred whilst the Company is trading insolvent. Not sure whether your company is insolvent, please book a free consultation with our insolvency expert.
What Is Statutory Demand?
It is common business practice for creditors (entities that are owed money) to seek payment of debts by issuing invoices, then phone calls if payment is not received and finally by delivering a letter of demand. Creditors of a company may issue a Statutory Demand for payment of a debt (total amount must exceed $2,000.00) as long as the debt is due and payable. A Statutory Demand can be used after default judgement has been entered.
Do not ignore a Statutory Demand, it could lead to the winding up of your company if it is not dealt with in a timely manner.
Companies that are served with a Statutory Demand have 21 days to apply to the Court to have it set aside. If they do not pay or contest the claim, the company will be deemed to be insolvent and ultimately be placed into liquidation.
What Is Winding Up Application?
If a company does not respond to a Statutory Demand issued by a creditor within 21 days, then the creditor has the option to pursue Winding Up of the company commencing with a Winding Up Application to the Court.
Do Not ignore a Winding Up Application. It’s time to act immediately.
When a creditor lodges a Winding Up Application to the Court, the matter then becomes public knowledge. This may have a negative impact on your business if you intend to pay your unpaid debts and continue trading.
However, if you do not have the means to settle your debt with your creditor, and the Court is satisfied that your company is insolvent and should be wound up, the Court will make an Order for the Winding Up of the Company and appoint a Liquidator. If you do not act quickly when you receive the Winding Up Application, your creditor may select a Liquidator to act in the Liquidation of your company.
Call us today on 02 8234 8865 to discuss how we can help you if your creditor has lodged a Winding up Application to the Court.
What Is Garnishee Notice?
Garnishee notices can be issued by creditors, but are more regularly used by the ATO as a way to collect outstanding tax debts.
When the ATO or a creditor is owed money, they can apply for a garnishee order to be made to retrieve their debt. A garnishee is usually sent to the debtor’s bank, or a third party who owes the debtor company money, it usually cause further damage to the Debtor’s already stresses cash flow.
What Does Receiving A Bankruptcy Notice Mean?
A Bankruptcy Notice is issued at the request of a creditor who is owed money by an individual (person) debtor. It requires the debtor to pay to the creditor the amount claimed in the notice (must be more than $5,000) within 21 days. If the debtor does not pay the sum, they are committing an act of bankruptcy.
I’ve been served a Bankruptcy Notice. What do I do?
If you haven’t paid your debts and have now consequently been served with a Bankruptcy Notice, you have two options:
- Reach an Agreement with Your Creditor: You will have 21 days from the day you receive the notice to come to an agreement with your creditor. You may be able to discuss payment options and plans to pay off your debt.
- Don’t Reach an Agreement with Your Creditor: If you do not contact your creditor, or you do not meet their demands, you will be committing an act of bankruptcy. Your creditors may then have the option to make you bankrupt by order of the court.
Unsure how to come to an agreement with your creditors, or what the best step is in paying off your debt to avoid bankruptcy? Call CrossRoads Insolvency today on 02 8234 8865 to speak to one of our Bankruptcy experts.
How Long Does It Take To Place A Company Into Liquidation?
As long as over 95% of the shareholders of the Company agree to place the Company into Liquidation, it usually takes less than 24 hours. We will prepare the documents for the Director and the shareholders to sign, once all the documents are executed, the Company is officially in Liquidation.