Liquidations

Business Liquidation in Gold Coast

Insolvency Explained

When a company becomes insolvent and cannot pay due debts, it must be legally dissolved by an independent professional. The process of winding up a company, while protecting the interests of employees, creditors and shareholders, can be performed by a liquidator or voluntary Administrator.

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Voluntary Liquidation and Administration

Creditors and company shareholders can implement a voluntary liquidation. Company directors can enter voluntary administration. If the company fails to voluntarily engage with external administrators, creditors are able to initiate a compulsory liquidation of a company through a Statutory Demand. The appointed independent Liquidator or voluntary Administrator will oversee the process until the finalisation of the liquidation or administration. The insolvency practitioner's principle objective is to preserve and realise the company’s assets and distribute any surplus to creditors.

Legal Implications

This will provide the directors with a legal and compliant solution to their company's predicament. The Australian Corporations Law provides directors with a second chance while working with a registered liquidator who is qualified to administer and complete the tasks that lead to an orderly and fully legal conclusion. Once a company is in liquidation, all phone calls and correspondence will be directed to the Liquidator's office, therefore relieving the stress of dealing with creditors who cannot be paid.

As soon as a company becomes insolvent, Menzies Advisory should be contacted. When it is recognised that a company is no longer financially viable, its legal or accountancy team should engage a liquidator and ensure the director ceases all trade activities. We offer compassionate, solution-driven and efficient services to organisations throughout Victoria and Queensland.

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Liquidations

There are two forms of Liquidation which are dependent on the company being insolvent or solvent.

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A Creditors Voluntary Liquidation (CVL) process involves winding up an insolvent company.

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A Members Voluntary Liquidation (MVL) process involves winding up a solvent company.

Creditors Voluntary Liquidation

A CVL is activated by the shareholders of the company when the company is insolvent, or it may become insolvent in the future. A meeting of shareholders will resolve to appoint a Liquidator, and that person must be licenced by the Australian Securities and Investments Commission (ASIC) as a Registered Liquidator.

The role of the Liquidator is defined by the Corporations Act and its various schedules such that the Liquidator is obligated to carry out statutory tasks, including investigations into:

The financial position of the company;

The financial performance of the company;

Whether the company has traded whilst insolvent;

The quantum of creditors’ claims against the company;

Any offences by officers of the company which need to be reported to the ASIC.

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If the financial position of the company allows sufficient recovery of assets over and above the costs of the liquidation process, it is possible for excess funds to be distributed to creditors in the form of a dividend which is calculated in proportion to each creditor's total amount owed to the company. Dividends are also subject to various priorities provided to each class of creditor.

Creditors of a company are usually classified as:

Secured Creditors;

Employee Creditors; and

Unsecured Creditors.

In most cases and subject to some exceptions, secured creditors are paid first, followed by employee creditors and unsecured creditors in that order.

For further details on the costs and benefits of a Liquidation, the director’s obligations, the role of the Liquidator, the effect on the company’s directors and when you should consider the liquidation process, please visit our FAQ page. What is a Registered Liquidator?

When you require liquidation services in the Gold Coast, we can help. At Menzies Advisory we work hard to be a professional and trustworthy team that is available to you when your business needs to deal with debts. Since 2016 we have helped many companies within our community handle their debts and we want to help yours as well.

When you work with us, we make sure to work alongside you so the best decisions are made for your business. Our director is a registered liquidator with over 40 years of experience as an Accountant.

We work hard to provide your business with comprehensive liquidation services so that you don’t have to worry about that problem any longer. When you don’t have to worry about your company’s debts, you can focus on more important matters. Let us help you take that stress away.

To learn more about our liquidation team, please do not hesitate to visit the page that we have dedicated to our specialists. Click the link below to get in contact with one of our professional representatives.