Voluntary administration is an option for a company that is insolvent or likely to become insolvent, and would like to restructure or settle its debts while continuing to trade. Voluntary administration also allows the director of a company to put forth a proposal to its creditors to negotiate the debt and potentially settle it for less than the original amount.

During a voluntary administration, a licensed insolvency practitioner acts as the appointed administrator and helps manage the company while a plan for its future is created. This period is usually around 30 days and the company’s creditors will have the option of accepting the director’s proposal to settle debts, voting the company into a deed of company arrangement or if the proposal isn’t accepted then the company would usually be voted into liquidation. The third option (which isn’t usually acted upon) is to vote the control of the company back to the company directors.

A successful voluntary administration will result in the company being able to avoid having its assets sold off or having the company liquidated altogether.

AIS can help you with information about all aspects of voluntary administration, 24 hours a day and 7 days a week, on 1800 210 073.

Voluntary Administration offers a range of significant advantages:

1. Continued Trade
Under Voluntary Administration, your company is given the opportunity to restructure itself as it works to settle its debts, enabling it to continue to trade into the future. This isn’t possible for the long term with a company liquidation, which involves selling off the company’s assets and completely shutting down its operations.

2. Reduce Debt Amount
A Voluntary Administration provides directors with an opportunity to put forward a proposal to the company’s unsecured creditors. It is sometimes possible to settle the company’s debts for less than the original amount. This is known as a Deed of Company Arrangement (DOCA).

3. It Doesn’t Last Forever
A Voluntary Administration comes to an end once the company’s creditors either approve a Deed of Company Arrangement; vote to hand the control of the company back to the directors; or, in some circumstances, decide that the struggling company is unable to continue trading and vote to place it into liquidation.

The term “liquidation” refers to the legal dissolution of a company that is insolvent, which means that it does not have enough in the way of assets to pay all of its creditors in full. This is more commonly referred to as “winding up” or “dissolving” a company You would only need a liquidation for a Pty Limited or Limited company.

There are many factors that will influence the cost of a company liquidation. This includes:

• whether the company is insolvent or solvent
• the value of the assets; and
• the number of creditors involved

Every situation is going to be slightly different, so the best way to get an indication of the cost is to call us on 1800 210 073. Don’t appoint another liquidator without talking to us first. We will beat any written quote – guaranteed!

Our advice line is open 24 hours a day.

There are two ways a company can be placed into liquidation: voluntarily, or involuntarily.

1. Creditors Voluntary Liquidation (CVL)
Voluntary liquidation occurs when the directors and shareholders make the decision to have the company wound up. If 75% of the shareholders approve of the liquidation the vote will pass and the liquidator gets appointed immediately.

If a company is liquidated voluntarily the directors and shareholders can appoint a liquidator of their own choosing. This is the fastest and most cost-effective method for winding up a company.

2. Court Liquidation (or Compulsory Winding Up)
A company liquidation is involuntary when it is forced upon it by the company’s creditors. When an application has been made by a creditor to have the company wound up, the directors no longer have the option of doing it voluntarily. They will also be unable to appoint a liquidator of their choosing; as it will be in the hands of the creditor who made the application to court..

For 24/7 advice on voluntarily placing your company into liquidation, call us on 1800 210 073.

The goal is for the company’s available funds to be distributed in a fair and orderly manner. The liquidator is responsible for selling the company’s assets and distributing the proceeds in the prescribed manner. The costs and expenses of the liquidator are paid first, after which any excess funds (if available) are paid to the company’s priority creditors and then any ordinary unsecured creditor claims.

The liquidator will also investigate the company’s affairs and ensure that all of its actions were legitimate and fair, in particular, payments to its creditors. If there is evidence that any creditor received a payment that was in preference to the other creditors, the liquidator can apply to the Court to have that transaction reversed so that the funds can be distributed fairly. This also applies if it is found that a director entered into an uncommercial or unfair director related transaction.

As ordered by the Australian Corporations Act, a company liquidation can only be handled by a Registered Liquidator who is licensed by the Australian Securities and Investments Commission (ASIC). Once appointed, the liquidator is the only one authorised to deal with the company’s affairs – the company directors will no longer have any power.

The time it takes to complete a company liquidation will vary depending on how complicated the company’s affairs are. There is no set time within which the liquidation needs to be completed and as such, it can range from 12-18 months (for an average sized company that is fairly uncomplicated) to longer (if, say, litigation is needed or other matters need to be resolved). The main factors that affect the time-frame of the liquidation are the structure of the company, its dealing prior to being liquidated and whether it will be necessary to litigate.

In addition, the liquidator must wait for a clearance from ASIC before they can finalise the liquidation. Once they receive this they can call the final meeting of creditors and members of the company, and then complete the process.

To better understand the process of a liquidation and the role you play in it, feel free to contact us at anytime on 1800 210 073.

When a company is placed into liquidation, the liquidator has the task of selling the company’s assets and using those funds to pay out the costs of winding up the company. There is an order in which the funds are to be paid out, which is set out in the Corporations Act (Section 556) and is to be strictly followed.

The following costs are to be paid in this order before any ordinary unsecured creditors can receive any funds. This includes an order of paying any expenses incurred by the liquidator, any petitioning creditor’s costs and legal fees, other professional fees and employee wages and entitlements.

If, after all of the above have been paid in full, there is not enough money left over to pay 100% of ordinary unsecured creditor claims, then the unsecured creditors will receive a partial dividend on a pro-rata basis.

For a more detailed account of fund distributions or if you are considering a company liquidation and have concerns about your liabilities being paid in full, call us on 1800 210 073.

If the company is insolvent and unable to pay all of its creditors in full, it should be immediately placed into voluntary liquidation by the company directors. If the directors delay they could become guilty of insolvent trading which has serious implications for the directors. One might also choose to appoint a liquidator when there are serious disputes between directors and/or shareholders that are likely to adversely affect the company’s ability to continue trading (this is known as a Provisional Liquidation).

If the company is not insolvent but the directors wish for it to be deregistered, a liquidator can be appointed to oversee a “solvent liquidation”, which is essentially placing the job of realising the company’s assets and paying out the debts into the hands of a registered liquidator. Alternatively, the company can pay out all of its debts itself and then simply apply to ASIC to be deregistered.

If you are wondering if you should place your company into liquidation, your first step is to determine whether or not the company is insolvent.

To be insolvent is to be unable to pay your debts as and when they fall due. In this instance, the company director/s need to consider taking the active step of appointing a liquidator on a voluntary basis. To not do so is to place oneself at risk of “insolvent trading”, meaning that the company has incurred debt during a time in which it was insolvent.

If there is a chance that your company is either insolvent or close to it, call us today on 1800 210 073. We can carry out an assessment of the company’s affairs and confirm whether or not company liquidation is necessary.

We are available 24 hours 7 days a week for free and confidential advice.

If your company is insolvent, or is likely to become insolvent, the natural inclination is to continue trading in the hope that things will turn around. There are, however, many reasons why making the decision to voluntarily place your company into liquidation is a more beneficial course of action. These include:

• Avoiding civil penalties of $200,000 for trading whilst insolvent.
• Avoiding becoming personally liable for certain debts.
• Gives the director a sense of control over the process.
• Allows directors to appoint a liquidator of their choosing
• Reduces the stress associated with running an insolvent company
• All creditor contact is placed in the hands of the liquidator
• Peace of mind that the company’s affairs are being wound up in an orderly and professional fashion.

If you have been considering placing your company into voluntary liquidation you should seek professional advice. We can help you to determine if your company is insolvent and discuss the potential benefits of making the decision to wind it up. We are available 24 hours 7 days a week on 1800 210 073 for free and confidential advice.

Some of the most common signs of insolvency include:

– Poor Cash Flow
– Unpaid or overdue Taxes
– Unpaid or overdue employee entitlements
– Suppliers stop supplying or demand cash on delivery
– Inadequate Company Books & Records

If your company is experiencing any of the above, you may be headed towards insolvency. To assess whether your company should enter into liquidation, give Australian Insolvency Services a call on 1800 210 073. We can look into your case, determine your solvency and assist you with the most appropriate course of action.

If you have established that your company is insolvent, you should take immediate steps to ensure that it does not continue to trade whilst it is insolvent. Allowing a company to trade whilst it is insolvent can have serious consequences for a director.

Your options may include to:

– Close the business by initiating a company liquidation
– Keep trading by entering into a Voluntary Administration and restructuring to become profitable.

So if your company is insolvent, or likely to become insolvent, give the insolvency specialists at AIS a call today and we will happily provide a no-obligation quote. Contact 1800 210 073.

The Corporations Act imposes a clear duty of care on directors not to ‘prevent a company from trading if it is insolvent’ as the consequences can be disastrous if the company later fails.

A company director can be found guilty of insolvent trading if it can be proven that:

1. The company incurred a debt whilst it was insolvent;
2. The director was aware, or should have been aware, that the company was insolvent at the time; and
3. The director failed to prevent the company from incurring the debt.

If the court finds a company director guilty of incurring debt whilst insolvent, they can become subject to penalties including:

1. Civil penalties up to $200,000;
2. Compensation proceedings – the company director could become personally liable, by order of the court, for a compensation payment to the value of debts incurred whilst the company was insolvent;
3. Criminal charges – the company director could be referred to the Director of Public Prosecutions and become subject to a criminal prosecution.

If you are faced with these risks or possible risks, you should seek independent advice from a suitably qualified insolvency accountant like those at AIS. To find out how we can help you, contact us today on our 24/7 hotline on 1800 210 073.

This is one of the most common questions the team at AIS are asked.

Liquidation and Voluntary Administration are the two options available to a company encountering irreparable financial distress.

The two major differences between liquidation and voluntary administration lay in the level of control held by the company director and the future of the business. Owing to the benefit of allowing businesses companies to resume trading following the completion of liquidation processes, voluntary administration is regarded as the best option for businesses who are facing insolvency and whose restructuring will prove worthwhile. For businesses companies who have reached a point of no return however, liquidation is recommended.

A Personal Insolvency Agreement (PIA) is a legally binding arrangement with your creditors whereby you will commit to paying a certain amount in order to settle your unsecured debts. Your creditors then freeze your debts so that they will stop accruing interest and charges, and over the course of the agreement they will receive a percentage of the frozen debt.

In order for a PIA application to be accepted you need at least 75% of your creditors (in value) and 50% (in number) to vote in favour of it at a creditor meeting. Once it has been accepted the PIA becomes binding on all unsecured creditors, even those who may have voted against it. Whilst you are under the protection of an active PIA no unsecured creditor is able to try to have you made bankrupt.

For more information on Personal Insolvency Agreements and how AIS can help you to propose one, contact us today on 1800 210 073.

A Personal Insolvency Agreement (PIA) is an excellent alternative to bankruptcy for those who stand to be particularly adversely affected by it, such as those with a property or who need to travel overseas often. Not only will a PIA help you save your house but it will also stop your creditors from forcing you into bankruptcy. So long as you maintain your mortgage repayments and complete your PIA your home should be safe. On the other hand however, during the PIA process travel and borrowing credit will be restricted.

For more information on Personal Insolvency Agreements and how AIS can help you to propose one, contact us today on 1800 210 073.

Not every individual is eligible to apply for a Personal Insolvency Agreement (PIA). To qualify for a Personal Insolvency Agreement, a debtor must:

• Have unsecured debts of more than $118,063.40
• Earn an income of more than $88,547.55 p.a. (after tax) or $119,138 p.a. (before tax)
• Have available equity in assets of more than $236,126.80.

Additionally, you may are able to propose a PIA if you have not applied for another one in the past six months and have residential or business connections to Australia.

If you do not meet any of these amounts you may need to consider a Debt Agreement. For more information on a PIA and how AIS can help you to propose one, contact us today on 1800 210 073.

Bankruptcy is a process designed to provide a fair and equitable outcome for all involved if an individual is unable to pay their debts. It gives the debtor instant financial relief and ensures that if there are any funds that can be put towards the debts, they are realised effectively and distributed evenly.

Bankruptcy also presents a number of disadvantages to an individual, so it is important that one is fully aware of all implications before making any final decisions. This includes placing a record on your credit file, impairing your ability to source finance in the future, restrictions on overseas travel and a permanent listing on the National Personal Insolvency Index. Some careers may be affected by bankruptcy, and if you have any substantial assets such as a home, you may need to surrender them to your bankruptcy Trustee to repay your outstanding debts.

Bankruptcy should always be considered as a last resort and at Australian Insolvency Services, we strongly recommend that you explore all other options before coming to the decision to file for personal bankruptcy.

Legal alternatives to avoid bankruptcy include:

– Debt Agreement

– Personal Insolvency Agreement

Adopting smarter financial management and spending habits can also avoid bankruptcy and insolvency altogether.

Receiving the right information and advice on the options available when you are experiencing financial difficulty is essential to making an informed decision. Whether it is bankruptcy that is best for you, a Debt Agreement or Personal Insolvency Agreement, or even some simple budgeting advice – you need to feel comfortable that you have made the right decision for you and your household.

For more information or for free, no-obligation insolvency advice, contact AIS’s 24/7 hotline at 1800 210 073.

A Registered Bankruptcy Trustee is a properly qualified personal insolvency practitioner who is registered with the Australian Financial Security Authority (AFSA) to administer bankrupt estates and handle your financial affairs. In order to be eligible to become a Trustee, one must hold a university degree in accountancy, be a member of the Institute of Chartered Accountants (or CPA) Australia, and preferably be a member of the Australian Restructuring Insolvency & Turnaround Association (ARITA).

Registered Trustees can administer all administrations provided for by the Bankruptcy Act of 1966, which includes bankruptcy, Personal Insolvency Agreements and Debt Agreements. Bankruptcy Trustees have statutory duties as outlined in the Bankruptcy Act. They are required to give impartial, honest bankruptcy advice in their dealings and to make decisions based on equity and fairness between creditors and debtors. All Registered Trustees are monitored by AFSA and subject to annual inspections, so the highest levels of standards are guaranteed to be met.

With a Registered Trustee on site at Australian Insolvency Services, you can rest assured that a professional, reliable and qualified bankruptcy advisor is personally dealing with your bankruptcy case. Our experienced bankruptcy team are fully qualified to provide you with the best possible service.

Choose Australian Insolvency Services for professional, honest and dedicated bankruptcy services. You can contact us on our 24/7 hotline at 1800 210 073 for free and impartial bankruptcy advice from expertly trained bankruptcy advisors.

If someone owes you (the creditor) $5000 or more, you can apply online to the Official Receiver for a bankruptcy notice. This bankruptcy notice requires the debtor to pay the debt within 21 days. If they fail to pay the debt, they have committed an act of bankruptcy.

If you fail to deal with a bankruptcy notice in the appropriate way the creditor can apply to court for a Creditors’ Petition to be issued. Once a Creditors’ Petition has been filed in court it will allocate a hearing date. If the debt remains unpaid at the time of the hearing the court will issue a sequestration order and you will become bankrupt.

If you have been served with a bankruptcy notice, you may be able to stop a creditor from forcing you into bankruptcy by proposing a Debt Agreement or Personal Insolvency Agreement. To find out more about bankruptcy notices, contact Australian Insolvency Services today on 1800 210 073. We offer free advice 7 days a week.