When is the Best Time to Liquidate My Company?
Deciding when to liquidate a company can be challenging. Many factors play a role in the decision and whether you move forward soon with the process. There are several details to discuss and analyse before placing your company into liquidation.
Assessing Whether the Company is Solvent or Insolvent
Before moving further in the process, you need to establish if the company solvent or insolvent. This is important because the liquidation processes are quite different. On our website, we have a one-minute assessment that we encourage you to take to see whether your company is insolvent or solvent.
Members Voluntary Liquidation (solvent liquidation)
If your company is solvent, you should choose a Members Voluntary Liquidation. This is the process where your firm pays its debts in full and returns any surplus funds to the shareholders. In this process you will need to make sure all taxation returns have been filed and the Australian Taxation office gives your company a tax clearance.
Voluntary Liquidation v. Court Liquidation
If your company is insolvent, you have two options. The first option is a Creditors Voluntary Liquidation (CVL). With a CVL, you can appoint a registered liquidator of your choosing to manage your assets and pay your debts to creditors.
The second option for an insolvent company is a court liquidation. A court liquidation is only necessary if the directors and shareholders cannot agree on the registered liquidator (i.e. there is a deadlock between the directors and shareholders). In this situation, either shareholder can approach the court and apply for a liquidator to be appointed.
Unpaid creditors can also approach the court for a liquidator to be appointed.
We Are Here to Help!
To explore your options, contact Australian Company Liquidations on 1800 981 070. We would be pleased to assist you with the liquidation of your firm.