If your company is insolvent, you have an obligation as a company director to place your company into liquidation or voluntary administration. If your company is insolvent and you do not take the appropriate steps to place your company into liquidation you may become personally liable for company debts incurred whilst the company is insolvent.
Appointing a registered liquidator will ensure that the affairs of the company are dealt with in an appropriate manner and by a suitably independent and qualified person. The liquidator will also wind up the affairs of the company in an orderly and fair way. The liquidator will pay out the funds in the correct order.
On a personal level, directors often find that placing their company into liquidation is like the release of a pressure valve. Once the company is in Liquidation, a director is free to move on with his/her life after what has often been a long andstressful battle to keep the company afloat. All enquiries from the date of Liquidation are directed to the Liquidator who becomes the sole point of contact for affected parties / creditors.
Appointing a liquidator may also have the benefit of avoiding personal liability for debts such as in the case where the ATO have issued a Directors Penalty Notice and you appointed a liquidator within the 21 day notice period. However, it is important to note that personally liability cannot be avoided where the Business Activity Statements (BAS) were not lodged with the ATO within 3 months of their due dates.
To learn more, call the registered and licensed liquidation experts at Australian Company Liquidations today on 1800 981 070.