Are you thinking about liquidating your company, but you aren’t sure if it is the right decision or not given all of the government stimulus packages which are available at the moment?
If your company was insolvent before all of the government stimulus was put in place then it is likely that your business will continue to be insolvent when the government stimulus comes to an end.
At Australian Company Liquidations, we have listed below the top 5 reasons why liquidating your business now may be more advantageous.
- Choose your own liquidator
- Avoid or minimise an insolvent trading claim
- Avoid personal liability from personal guarantees
- Limit personal liability from unpaid GST
- Need the stress
You can chose your own liquidator. If you wait until the government stimulus ends and the other insolvency laws return to normal, creditors may approach the court and appoint a liquidator of their own choosing. By choosing your own liquidator, you can appoint someone who you believe will act in a professional and commercial manner. It will also take away any surprises from a creditor approaching the courts to have a liquidator appointed.
Whilst the Federal Government recently suspended the insolvent trading laws due to the COVID 19 pandemic for six months, effective 25 March 2020, company directors will still be liable for any insolvent trading before 25 March 2020. As such if your company was insolvent before 25 March 2020, we would recommend that you still liquidate your company to limit any further personal liability. Trading on past 25 September 2020 will expose you to further insolvent trading claims.
Company directors should note that no other insolvency laws were suspended during the COVID 19 pandemic so this means that directors will continue to be liable for any debts where they provided a personal guarantee or directors guarantee.
From the 1st of April 2020, company directors will be personally liable for any GST where the company has not lodged it BAS within 3 months of its due date. The ATO can then issue a Director Penalty Notice to collect the taxes from you personally. Prior to the 1st of April 2020, company directors were liable for PAYG and Superannuation where the company has not lodged it BAS or SGC statement on time.
Liquidation may help end the stress you may have been experiencing so can you can then focus on rebuilding a future.
If you would like more information on company liquidations, or are considering one yourself, then please contact Australian Company Liquidations. We are registered company liquidators who offer a FREE 24/7 insolvency hotline for Australian directors seeking expert advice. Please call us on 1800 731 155 now.