Have you recently received a Director Penalty Notice (DPN) from the Australian Taxation Office (ATO), but don’t have the means to repay the tax debts being demanded?

Worried you might lose your family home or other valuable personal assets?

Don’t panic you may still have options to avoid strict personal liability, if you have lodged your Business Activity Statements and Superannuation Guarantee Statements (within 3 months of their due dates).  If you have lodged these statements but not paid the underlying debt, the ATO may issue a regular DPN and you will be given 21 days to avoid becoming personally liable for the PAYG and superannuation. This 21 day period starts ticking the day the ATO sends the Director Penalty Notice – so you must act fast.

What are my three options?

Your first option after receiving a regular Director Penalty Notice is to pay the debt owed in full. However, if you do not have the means to pay the debt, there are two formal solutions available to you.

The second option is to appoint a liquidator to your company. This option will avoid the director becoming personally liable. Please note that the appointment must be formally made within the 21-day period.

The third option is to appoint an administrator. The appointment of a voluntary administrator must likewise be formally made within the 21-day period.

What happens if I don’t meet the 21-day deadline?

Failure to take one of the 3 options within the 21 day time period of receiving a regular Director Penalty Notice means the director will become personally liable for the debt set out in the notice.

This could result in the director becoming bankrupt if they are unable to pay the debt, which may result in them losing personal assets and the family home.

Did you know there are several types of DPN notices? – be aware of the Lock Down Notice!

 If the director has failed to lodge their Business Activity Statements and Superannuation Guarantee Statement within 3 months of their due dates, then the director automatically becomes personally liable for the unpaid PAYG and superannuation. In these circumstances the ATO will issue a different type of notice.  This notice will be a lock down DPN. A lock down DPN can be issued by the ATO at any time, even after the appointment of a liquidator or administrator.

The only way to avoid a lock down DPN is to ensure that all Business Activity Statements and Superannuation Guarantee Statements are lodged within 3 months of their due dates.

The Importance of keeping your address current

DPNs are sent to the director’s residential address as recorded with the Australian Securities and Investments Commissions (ASIC). This is why it is crucial that your personal address is up-to-date with ASIC, otherwise you may miss receiving a DPN and will miss the opportunity to avoid personal liability.

Where does Australian Company Liquidations fit in?

At Australian Company Liquidations, we assist company directors to place their companies into liquidation or administration within the required time frame should they receive a regular DPN.  If you receive a lock down notice we can also assist with personal bankruptcy or a Personal Insolvency Agreement.

Remember to act fast as you only have 21 days from the date of the notice, so don’t delay taking action. Protect your personal assets now by calling us on our toll-free hotline at 1800 981 070.

What is Provisional Liquidation?

Provisional liquidation is an interim procedure to protect a company’s assets under specific circumstances. If you are a shareholder, director, or creditor, you may think about provisional liquidation to keep the company’s assets safe and secure. According to the law, the provisional liquidation procedure can only be initiated under particular conditions.

What situations call for provisional liquidation?

• Investors think directors are acting recklessly. Shareholders who don’t like what the directors are doing can ask for provisional liquidation to get a third-party manager and protect the company’s interests.
• Creditors suspect the debtor company is disguising assets: Provisional liquidation could be an option for creditors who are worried that a debtor company will hide assets or make them hard to get to.
• The conflict between the directors of an insolvent business before liquidation: The company’s future course may be compromised if there is conflict among the board of directors. In this case, the corporation and its assets may be safe if a provisional liquidator is put in charge until the problem can be fixed.

Who can apply for the appointment of a provisional liquidator?

The appointment of a provisional liquidator may be requested by creditors, members or stakeholders, the firm, and the court. ASIC has a history of filing applications for provisional liquidators in certain circumstances. ASIC may become involved in situations where a company has misappropriated investor funds, made transactions without apparent commercial justification or violated record-keeping and account-keeping regulations. These situations may also involve the company engaging in illegal transactions under the law. At APRA’s request, a court could choose a provisional liquidator, which would be the last step.

The Advantages of Appointing a Provisional Liquidator

Asset protection and having a third party look into the company’s affairs are two of the main benefits of provisional liquidation.

Asset protection

At a crucial time when there is a high risk of asset dissipation, the provisional liquidator safeguards the company’s assets (typically experiencing financial difficulties). Provisional liquidation lets the directors and officers of a company hand over control to a neutral third party who will act in the company’s best interests.

An unbiased investigation

The company’s activities are looked at, and the temporary liquidator gives the court an honest opinion about how things are going with the company.

What happens following the appointment of the provisional liquidator?

The provisional liquidator’s job is to keep the company’s operations and assets running until the court decides how to close it down. The company will typically continue to an actual liquidation, and it is typical for the same provisional liquidator to remain an official liquidator. In other words, the provisional-liquidation stage is over because the corporation goes into liquidation. However, a successful reorganisation may cause a preliminary liquidation to stop in specific circumstances. During the provisional-liquidation period, the company could successfully restructure its operations and finances, restoring its solvency and allowing it to resume normal business activities. The time between the wind-up application’s filing and the actual wind-up hearing can be pretty significant.

Contact Australian Company Liquidations if you would like more information about company liquidations. We are registered business liquidators who provide a free 24/7 insolvency hotline for Australian directors looking for expert help. Call us right now at 1800 981 070.

Why You Should Appoint a Liquidator Voluntarily

When your company is insolvent, you have several options of how to proceed with a liquidation. There are necessary steps you must take into consideration to properly follow. One of these processes is finding a liquidator.

Unless you prefer to have your liquidation planned by your creditors and ordered by the Court, you can choose your own liquidator. The option of appointing your own liquidator is only available if your creditors haven’t applied to court. If your creditors have already applied to court, then it is too late and you will need to work with the court appointed liquidator. Most people like to plan their liquidation carefully and find a registered liquidator who they feel comfortable withing with.

Choosing a liquidator can also be based on recommendations from accountants and lawyers who have experience in the insolvency industry.

We have registered company liquidators who have had more than 30 years experience in the ins. Call us today to book an appointment.

At Australian Company Liquidations, we pride ourselves on providing high quality customer service. For more information, call our office on 1800 981 070.

As a director of a company that goes insolvent, you may think that it would have various impacts on your ability to obtain credit. Whilst there may some implications involving you if your company does go into liquidation, it’s not as bad as it may first appear. Below is some important information you should know before proceeding with a company liquidation.

If you are a director of a company that becomes insolvent, a record of the company liquidation will be recorded on your personal credit file whilst the liquidation is still being completed. This information can be accessed by lenders when they do a background check on your credit history.

Whilst this does sound ominous, it’s important to remember that a company is a separate legal entity. As a director, you may not be directly liable for your company’s debts. A company liquidation is not the same as a personal bankruptcy and does not leave the same mark on your credit file, thus it does not prevent you for obtaining a personal loan like bankruptcy does.

Once the liquidation has been finalised, the record of the liquidation should then come off your personal credit file or it will be marked as finalized. If you need to obtain personal finance whilst the liquidation is still being completed and the liquidator has not identified any claim against you, then most liquidators will provide a letter to assist with your finance application.

If you would like to learn more about the impacts of a company liquidation and which path is best for you it is best to consult a registered liquidator. Our friendly and registered liquidators can help you do that and assist you through each step of the way. We offer a FREE initial consultation and expert advice. Please contact us on 1800 981 070 now to learn more about your options.

Company liquidators are responsible for overseeing and conducting the entire process of liquidation. Their role is critical to ensuring the most cost-effective outcome for all parties involved. Liquidators are required to act in an independent and impartial manner whilst winding up the affairs of a company, as bias is regarded as a very serious matter by the courts.

Company liquidators are responsible for the distribution of assets of the company, as well as any surplus monies, to the company’s creditors. The role of the liquidator also entails thoroughly investigating the financial affairs of the company and reporting any wrongdoings, such as potential claims for preferential payments and trading while insolvent.

HOW LONG DOES A BUSINESS LIQUIDATION
TAKE TO COMPLETE? FIND OUT HERE

The findings of the company liquidator must then be reported to the Australian Securities and Investments Commission (ASIC) as well as all affected creditors. After a clearance has been received by ASIC, the liquidator can then proceed to finalise the company’s winding up process.

If you, as a director of an insolvent company, have decided to initiate a voluntary wind up your business, you have the option of selecting a liquidator of your own choosing. Australian Company Liquidations (ACL) is a team of highly skilled and licensed company liquidators. With ACL, your company can begin the process of liquidation within 24 hours of you contacting us, provided you give us all the necessary information.

To better understand the role of company liquidators or the liquidation process, call ACL today on 1800 981 070.

What does it mean when a company goes into liquidation?

When a company is facing insolvency or extreme financial difficulty, company liquidation is the process of closing the business, selling the assets and paying as much debt to creditors as possible. In Australia, there are two paths to liquidation for insolvent companies.

Creditor’s voluntary liquidation occurs when creditors vote for liquidation after a voluntary administration or terminated deed of company agreement. Court liquidation usually happens after a creditor has applies to the court to appoint a liquidator to wind up the company. Regardless of the path taken, the result is the same.

What does liquidation mean for company directors?

During liquidation, the primary role of directors is to fully co-operate with the liquidator. They must provide all information about the company, its books and its assets to the liquidators and attend a creditor’s meeting, if requested to, to make the information available to them as well. Directors must also produce a written report for the liquidator within 14 days for involuntary liquidation and 7 days for voluntary liquidation.

Liquidators will be looking closely at whether directors knew the company was trading while insolvent. They will also be looking for inappropriate dealings. The consequences of any transgressions for directors can be severe, up to and including criminal proceedings.

What happens to shareholders when companies go into liquidation?

Shareholders are the last in line when a company goes into liquidation and only receive a return once creditors and the liquidator have been paid. There is no requirement for the liquidator to keep them informed of anything. Shareholders have no right to vote on how the process is conducted.

What happens to employees?

Employees will lose their jobs if their employer goes into liquidation. If there are not enough assets to cover debts, they may also miss out on some of their entitlements. The Federal Government runs the Fair Entitlements Guarantee Scheme. This provides minimum payments in terms of unpaid wages, annual and long service leave, payment in lieu of notice and redundancy pay.

If your company needs to be liquidated, please contact Australian Company Liquidations on 1800 981 070. We are registered company liquidators who offer a free 24/7 insolvency hotline for Australian directors seeking expert advice.

Closing down your company can be a stressful time. If your company cannot afford to repay its debts, it is most likely insolvent. As a director, you have an obligation under the law not to incur any further debts when your company is insolvent and you may wish to consider winding it up and appointing a liquidator.

Liquidation

If your company is insolvent, liquidating the company means your business stops operating and a liquidator is appointed either by the shareholders or by court order. The liquidator’s role is to preside over the orderly winding up of the company.

The liquidator will oversee that there is a fair and equitable distribution of the company’s assets (which must be in accordance with the Corporations Act). The liquidator will investigate the affairs of the company to ensure that no creditor has received any unfair advantages over other creditors (such as received an unfair preference).

The liquidator will record the appointment with ASIC. As a director you will still need to fully co-operate with the liquidator and provide all necessary assistance such as delivering the company’s books and records to the liquidator.

Seeking advice from company liquidation experts can ease this stressful process and help prevent unwanted legal surprises.

If you are company director and you are considering a company liquidation, then call Australian Company Liquidations for free and confidential advice.  We operate a 24 hour insolvency hotline. Call now on 1800 981 070.

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.

Introducing the New Online Liquidation Portal

If you are looking to place your company into liquidation, Australian Company Liquidations has now created and launched an industry-first on-line portal to help you liquidate your company.

When you visit our on-line portal, you will be asked to provide details before proceeding with the liquidation. Please ensure you have the following prepared for your application:

● Company Name
● ACN
● Directors
● Shareholder Names
● Assets
● Creditors

This information is required in order to complete the liquidation process. You are eligible to use this application if you currently owe less than $1 million to your creditors. If you owe more than that, we ask that you please contact our office at 1800 981 070 to learn more about your potential options.

The current cost of liquidation is $5,500 including GST, so please also be prepared with payment before you complete this application. If you have any questions using the liquidation on-line portal, you can contact us and our friendly team can guide you through the process at any time. This can ensure that your application is completely swiftly and accurately.

If you have any questions about our new online portal, please reach out to us at Australian Company Liquidations. We are dedicated to providing help during times of crisis and can assist you with your liquidation process. Start your application today or give us a call at 1800 981 070.
 

How Long Do Company Liquidations Take?

A company liquidation is a difficult decision to make and has lasting impacts on your company. Once you have decided that your company will permanently close and you wish to apply for a company liquidation, you might be wondering how long this process will take.

We cannot give you a specific timeframe, as each company liquidation is different but we can give you a guide.

The liquidator will be required to go through a number of tasks which are mandated by law. The first task in any liquidation is to record the appointment of the liquidator with the Australian Securities and Investments Commission (ASIC). After recording the liquidation with ASIC, the liquidator must notify creditors of the liquidation within 20 business days and then prepare a more thorough report within 3 months of their appointment. After that the liquidator needs to file a report with ASIC within 6 months of their appointment. In some cases, ASIC requires a supplementary report from the liquidator. If a supplementary report is requested by ASIC, the timeframe within which the liquidation can be finalized will be pushed out.

In a simple case, where no supplementary report is requested by ASIC a liquidation can be finalized within around 12 months. If complex issues are identified the timeframe could become a number of years.

At Australian Company Liquidations, we pride ourselves on providing high-quality customer service and assistance with your liquidation needs. For more information, call our office at 1800 981 070, or visit our website for more details on company liquidation and the process.