IS LIQUIDATION YOUR ONLY OPTION?
Is your company operating at a loss? Are you heading for insolvency and unsure what to do to turn your business around and make it profitable again? Before you enter voluntary administrative or liquidation measures, there may still be a chance to save your company. A comprehensive corporate evaluation by the expert accountants and liquidators at Menzies Advisory may be able to identify a way in which you can regain control over your finances and return your company to profitability.
Our accountants and advisors are experts when it comes to recognising a company which is no longer in a viable financial position and wrapping up all remaining affairs. However, as well as guiding companies through liquidation, they are also able to identify a company which may still be able to continue to trade and return to profitability. By performing a comprehensive evaluation of a company, our experts can assess the viability of the business and develop an appropriate course of action. Sometimes this course of action is towards liquidation but other companies are salvageable.
If our experts consider it possible to return a company to profitability, they will work closely with the director to implement a series of recommended changes devised using our extensive knowledge and experience. As well as steering a company onto the right path, our advisors work to develop a plan for the future to ensure continued sustainability of the company. Here at Menzies Advisory we have successfully orchestrated a number of turnarounds for companies on the brink of insolvency.
Tactics used to support a corporate turnaround may include:
- Debt consolidation – working out a repayment plan with fewer creditors makes it much easier to recognise your financial obligations.
- New monitoring practices – every business must carefully track their cash flow and be able to identify costly or no longer viable practices.
- Change tactics – if you’re falling behind your competitors, identify their advantage from a consumer’s point of view and realign yourself towards your target market.
- Reorganise capital – look at where your money is invested and redistribute it according to what will bring in the greatest profit in the future.
- Down-size – if your business has grown too quickly and overstretched your financial resources, downsizing may solve all your monetary problems.
It is important not to persist in attempts to save a failing company to no avail. Sometimes it is best for directors, employees, shareholders and creditors for a company to be liquidated. Corporate bankruptcy does not have the same negative impact on your credit rating as individual bankruptcy and while it should be avoided, there is no reason why placing your business in voluntary liquidation should impact your capability to run a successful business in the future. In some cases, it is ill-advised to continue attempts to save a company when advised by an accountant or Registered Liquidator that profitability is no longer possible.
For tailored advice from industry experts, contact Menzies Advisory today and find out if your business can undergo a corporate turnaround and regain profitable trading.
Menzies Advisory in Gold Coast Brisbane Melbourne and Sydney are specialist Liquidators
Menzies Advisory in Gold Coast Brisbane Melbourne and Sydney are specialist Liquidators
Registered Liquidators are experienced accountants, licenced and regulated by the Australian Securities and Investments Commission (ASIC). They are appointed to take over the running of insolvent or failed companies and oversee the final period before all affairs are finalised and the trading body is dissolved. Registered Liquidators must be appointed in the event of a Creditors Voluntary Liquidation to resolve any debts accrued by the company in the most efficient way possible. A Creditors Voluntary Liquidation (CVL) is the most common liquidation appointment type. In the event of a company entering insolvent external administration through CVL, it is the task of a Registered Liquidator to manage the finances and affairs of the body in a fiduciary capacity. After an Extraordinary General Meeting between the shareholders of a company, a Special Resolution will be passed which symbolises the instigation of the process by which the company will be wound up: liquidation. The directors, creditors and shareholders then step away from the organisation which has entered liquidation and their responsibilities are passed to a Registered Liquidator. This professional winds up all ongoing affairs which can include the collection of any outstanding debts and the disposal of company-owned assets. A Registered Liquidator must provide a document titled Consent to Act as Liquidator before they are appointed. Throughout all liquidations, the Registered Liquidator must file relevant documents with ASIC as well as providing ASIC with their yearly return. This enables the Commission to ensure only the highest quality of Registered Liquidators are operating and providing services throughout Australia. ASIC keeps a Register of Liquidators under the Corporations Act 2001 upon which every person is provided with a Registered Liquidator Number. In order to be registered, the person must demonstrate their relevant qualifications, experience, abilities and knowledge. Each registration is valid for 3 years, after which the Liquidator must reapply to maintain a valid license. All Registered Liquidators hold an accountancy degree as well as valid membership to the Institute of Chartered Accountants and/or CPA Australia. In the event of an organisation becoming insolvent, the appointment of a qualified, experienced and professional Registered Liquidator will ensure the subsequent process of winding up the company is completed correctly and responsibly. A Registered Liquidator is capable of completing this complex task efficiently and with minimal unnecessary stress to the directors and shareholders. For more information, contact Menzies Advisory Liquidators & Receivers where our Principal is a Registered Liquidator, Official Liquidator and has been a Certified Practicing Accountant for over 35 years.
Sometimes shareholders and company directors decide to cease trading despite the continued viability of the company. When this decision has been made, it is best to bring in external administrators to complete the Members’ Voluntary Liquidation process. By hiring qualified and experienced professionals, the process of finalising all company affairs, deregistering your company and the distribution of remaining funds amongst shareholders will be completed in a timely, commercially beneficial and legally correct fashion. While the terms ‘administration’ and ‘liquidation’ are most often associated with insolvent companies, it is also possible for the affairs of solvent companies to be wound up in this matter. There are various reasons why a business may choose to wind up rather than be sold as a going concern or continue trading. These include: Redistributing capital tax free Restructuring a company Business is no longer trading/required Bringing a company to its legal end – once deregistered it cannot be reinstated When a reason is decided upon, the majority of directors are obliged to sign a Declaration of Solvency form, stating the company is in a position to pay all existing debts within the upcoming year. Dormant companies may also be deregistered through this external administration process. Winding up a solvent company through external administration is easier and simpler than an insolvent company because, by definition, the company is in a position to repay any and all outstanding debts. 75% of company members are required to vote in favour of bringing in an external administrator at a meeting in regards to the Special Resolution. Once a company has entered the Members’ Voluntary Liquidation, the company can begin to be wound up by an external administrator. The appointed administrator will meet with any creditors and take care of any legal paperwork with the court, government and ATO. Once a company has been wound up, the remaining value of the assets can be distributed among shareholders. At this point the company will be legally deregistered. The external administrator is, by definition, independent and impartial. Their sole task is to preserve the company’s assets, comply with all legal obligations and return all funds to creditors and/or shareholders. Therefore, the external administrator cannot be someone with a conflict of interest or some form of duty within the company itself. Impartiality ensures the correct protocols are followed and the liquidation is completed in compliance with all laws. If you are considering placing your solvent company into voluntary external administration, contact Menzies Advisors today and find out more about how our expert liquidators and administrators can help wind up your company as quickly and commercially successfully as possible.
Menzies Advisory in Gold Coast Brisbane Melbourne and Sydney are specialist Liquidators
Menzies Advisory in Gold Coast Brisbane Melbourne and Sydney are specialist Liquidators
Menzies Advisory in Gold Coast Brisbane Melbourne and Sydney are specialist Liquidators
Menzies Advisory in Gold Coast Brisbane Melbourne and Sydney are specialist Liquidators
Menzies Advisory in Gold Coast Brisbane Melbourne and Sydney are specialist Liquidators
Menzies Advisory in Gold Coast Brisbane Melbourne and Sydney are specialist Liquidators
