Just as 2020 is coming to an end, so is the insolvent trading moratorium. It is vital that businesses do a health check and take corrective action if needed.
The temporary COVID-19 Safe Harbour changes to Corporations Act came into effect on 25 March this year and directors could retrospectively be personally liable for insolvent trading from that point. By being pro-active and recognising the signs you can get ahead of any possible issues and achieve a positive outcome.
Business recovery and liquidation specialists recognise and understand these signs and are able to steer you in the right direction and layout the options to mitigate risk and prevent action being taken.
In light of this unprecedented time, the Federal and State Governments have unveiled stimulus packages to assist local economies in light of the coronavirus pandemic and bush fires to provide tax relief and offer fiscal assistance.
Summary provided below.
If you are unable to pay your debts and cannot come to suitable repayment arrangements with your creditors, you may voluntarily lodge a petition to become a bankrupt (called a debtor's petition)
OR
a creditor may take action to have you declared bankrupt by order of the Court (called a sequestration order).
A Creditors Voluntary Liquidation involves the directors and shareholders resolving to wind up the affairs of the company due to the insolvency of the business and effectively stop trading.
A Creditors Voluntary Liquidation can occur when a company has been placed into voluntary administration and a proposal for a Deed of Company Arrangement has not been accepted by creditors or terminates.
