WHEN SHOULD I PLACE MY COMPANY INTO LIQUIDATION?
The decision to place your company into liquidation should not be taken lightly.
Firstly, you need to make a thorough assessment as to whether or not it is insolvent (note: it is insolvent if your company is unable to pay its bills as they fall due).
As a general rule, if your company is unable to pay all creditors 100 cents in the dollar, then a liquidator should be appointed.
To determine where your company falls on the solvency spectrum, take our 1 minute self assessment survey here or call our licensed and registered liquidation experts on 1800 731 155.
WHAT IS THE PROCESS OF LIQUIDATION?
Once you decide to liquidate your company, you have two choices for the wind up process:
- A Creditors’ Voluntary Liquidation, where you voluntarily place the company into liquidation; or
- A Court Appointed Liquidation, where you can wait for a creditor to wind it up through the courts.
Under a Creditors’ Voluntary Liquidation, you have the choice to appoint a liquidator of your own choosing. If you do not want to initiate the liquidation on a voluntary basis, the courts or petitioning creditor will appoint the liquidator for you.
The appointed liquidator in either cases will oversee the orderly wind up of the company’s affairs. The liquidator will sell off the company’s assets then distribute the proceeds to creditors in accordance with the Corporations Act.
To further understand the process of liquidation or to voluntary appoint a licensed liquidator for your company today, call Australian Company Liquidations today on 1800 731 155.
HOW DO YOU PUT A COMPANY INTO LIQUIDATION?
In short, a liquidation is the process of winding up a company’s affairs and appointing a liquidator to the company. There are two ways a company can be placed into liquidation; either on a voluntary or involuntary basis.
The wind up process will include:
- The appointment of a liquidator (whether the liquidation was on a voluntary or involuntary basis will determine if the liquidator is appointed internally or externally)
- The liquidator identifying andrealising the company’s assets
- Selling the assets
- The liquidator reporting these results andtheir investigative findings of the company’s financial affairs to creditors
- The liquidator holding several meetings with creditors
To learn more about placing your company into liquidation, please call our registered expert advisers on 1800 731 155.
HOW LONG DOES A LIQUIDATION TAKE TO COMPLETE?
The length of time required for a liquidation will depend on a number of factors, including:
- The nature of the company’s structure
- The dealings the company entered into prior to liquidation
- Whether any litigation will be necessary.
If no litigation is necessary, the average-sized company liquidation should be finalised within 12 to 18 months.
To learn more about the liquidation process, call our registered and experience liquidators on 1800 731 155.
WILL THE LIQUIDATOR CALL ANY MEETINGS OF CREDITORS AND WILL I HAVE TO ATTEND?
The liquidator will be required to hold the first meeting with creditors within 11 days of appointment. Thereafter, the liquidator is required to hold a creditors meeting every year during the liquidation process, unless they issue a report to the Australian Securities and Investments Commission.
Prior to the finalisation of the liquidation, the liquidator must also hold a final meeting with all creditors and> members.
As a director of a company that has entered a Creditors’ Voluntary Liquidation, you will not be required to attend any meetings unless requested by the liquidator through a written notice under Section 530A(2)(c) of the Corporations Act.
Still have a question about the role of the liquidator? Call us today on 1800 731 155.