Step 1 – make an assessment as to whether my company is solvent or insolvent
The decision to place your company into voluntary liquidation What is a Company Liquidation? should not be taken lightly. Firstly, you need to make a thorough assessment as to whether it is solvent or insolvent (it is insolvent if your company is unable to pay its bills as and when they fall due). We offer a professional service to help company directors ascertain if their company is solvent or insolvent. Getting a professional and independent assessment is critical as we often find company directors are under a significant amount of pressure and cannot see the situation for what it is.
The consequences of continuing to trade whilst your company is insolvent what are the consequences of trading whilst insolvent? can be catastrophe. Take a few minutes to read our article on what you should look out for to determine if your company is insolvent How do I know if my company is insolvent?.
Step 2 – decide the type of liquidation – Voluntary Liquidation or Compulsory Liquidation
So, if you have established that your company is insolvent, the next step is to decide on the type of liquidation. You can choose either a Voluntary Liquidation or Compulsory Liquidation.
A voluntary liquidation is where the directors and shareholders both nominate a registered liquidator to accept the appointment for the winding up of the company. This is the most expeditious way to windup and a company. As soon as you nominate a liquidator, the appointment can be made very quickly thereafter.
A compulsory winding up is where a creditor approaches the court for the company to be wound up. This process takes much longer and driven by the creditor who petitions the court. As such the creditor or the court will nominate the liquidation.
If you would like to discuss when you should place your company into liquidation, please call Australian Company Liquidators on 1800 981 070.
The information provided in this site is general in nature and should not be relied upon for your specific circumstance. Call us on 1800 981 070 for a free initial consultation to discuss your specific issues.