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Corporate Insolvency & Liquidation Advice

Corporate Insolvency & Liquidation Advice

Your company may face insolvency or liquidation issues for many reasons.a major change in trading conditions which causes cashflow issues;

a tax assessment for GST, income tax or administrative penalties; or

legal proceedings with debtors, creditors or shareholders.Obtaining timely insolvency and liquidation advice is important for your company so that the company and the directors can take steps to protect themselves.

ATO Tax Debts

The Australian Taxation Office is aggressively pursuing companies for unpaid tax debts and may take steps to recover tax debts by:issuing a garnishee notice to your companys bankers;

issuing a directors penalty notice to each of the directors;

Serving a statutory demand on the company;

commencing legal proceedings for the amount of the debt; or

making an application to wind up the company.The directors need to obtain insolvency and liquidation advice and will need to consider whether a repayment plan can be put in place to avoid legal proceedings and/or winding up.

Statutory Demands

The consequences of a company failing to comply with a creditors statutory demand are harsh because there is a presumption that the company is insolvent. Acting quickly to obtain insolvency and liquidation advice is important because there is only a 21 days to comply with a statutory demand or apply to a Court to have the statutory demand set aside on grounds including that there is a genuine dispute about the debt or offsetting claim.For tax debts, a company may not claim that there is a genuine dispute about the debt, however, there may be other grounds open to the company to set aside the statutory demand.

Directors Survival Tips in the Face of Insolvency

The financial ramifications for the directors of a liquidator being appointed to a company may be devastating. The board of directors should consider:whether there are grounds to set aside a creditors statutory demand;

whether there are steps which can be taken to protect the assets of the company or the directors;

whether an objection should be lodged in relation to a GST assessment, income tax assessment or administrative penalty notice;

obtaining legal advice about administration, breaches of directors duties, personal liability of each of the directors and bankruptcy;

Directors Survival Tips in the Face of Insolvency Cont...

whether the ATO may remit any administrative penalties and/or general interest charge;

whether a payment plan for the debt can be put in place;

whether restructuring the company may assist;

whether to make a complaint to the Taxation Ombudsman or Inspector-General of Taxation; or

whether a Deed of Company Arrangement is an option.

Call Robson Hayes Legal : (08) 6181 0790Email at: info@robsonhayes.com.auVisit Website: http://probatewa.lawyer/