The role of the liquidator of the company includes, but is not limited to:
- Taking control and realising all of the company’s assets
- Investigating the affairs of the company and the conduct of its officers
- Distributing the surplus assets of the company to its creditors in order of priority
For any queries regarding creditors voluntary liquidation, what the process entails, how it will impact you or your client’s company and whether other options are available to you, please call our directors on 03 9818 8800
What happens to a company once it has been liquidated?
Liquidation means that control of company assets, any conduct of business and the management of all financial affairs becomes the responsibility of the liquidator. The company directors no longer have any control or authority over these matters.
All outstanding debts will be captured by the liquidation and creditors will not be able to seek recovery of same against the company without leave of the Court. This does not prevent creditors from seeking to recovery from directors if the director has signed a personal guarantee.
The liquidator will also conduct an investigation into the affairs of the company and the conduct of its officers which may result in further recover proceeding for voidable transactions and insolvent trading. ASIC may also determine to undertake their own proceedings if the matter is serious.
After completing the investigation into the affairs of the company, the realisation of the assets of the company the liquidator will distribute any surplus to its creditors in the order of priority set out in the Corporations Act.
What is the cost of putting a company into liquidation?
Each company and its complexities are different and so too are the costs of liquidation.
The costs of the liquidation from a company that has sufficient realisable assets will be ordinarily met from the realisation of those assets.
If a company has little or not assets, then a liquidator will generally seek that funding be made available to pay the costs of acting as liquidator of the company.
Our cost structure enables us to provide a competitive cost to liquidate your company. Our directors can provide a firm quotation on your specific circumstances at the first free, no obligation meeting or call.
Court Liquidation
Court liquidations are as a result of a creditor, or creditors of a company making an application to the court to have the company wound up, usually after the company has failed to comply with a statutory demand for payment.
Once the order has been issued by the Court, a liquidator is appointed at that time. Usually the creditor has already chosen a liquidator and obtained a consent to act to lodge with the court together with the application for the winding up of the company.
Please don’t hesitate to contact us on 03 9818 8800 to ask about court liquidation and how we can assist, including consenting to act.
Our experienced team ensures that court liquidations are handled with expertise and that all matters are resolved and actions carried out as quickly as possible.
Members Voluntary Liquidation
A members voluntary liquidation is, as the name suggests, a voluntary liquidation for the benefit of its members. It applies to companies that are solvent and are finalising their existence usually associated with the retirement of company owners or a company fulfilling its needs and ending its useful life.
To be eligible for a members voluntary liquidation the company must be able to declare that all of its outstanding obligations can be met within twelve months. Additionally all taxation lodgements and payment obligations are required to be up to date. After meeting the claims of any creditors the surplus assets of the company are then distributed to its members.
If you are seeking any further information on undertaking a members voluntary liquidation please contact us on 03 9818 8800 so we can answer any questions you have and assist with this action.
Simplified Liquidation
In 2020 in response to the COVID-19 Pandemic the government introduced a newer type of insolvency regime called simplified liquidations.
This process starts out as a Creditors Voluntary Liquidation and converts to a simplified liquidation, but only applies if certain criteria are met.
These criteria includes the following:
- The company will not be able to pay all its debts in full within 12 months after the start of the liquidation.
- All taxation lodgement obligations are up to date
- Debts to external creditors of less than $1 million (including amounts due to terminated employees but excluding contingent debts)
- Not have been through the process or used a simplified liquidation in the last 7 years – the same rule applies to directors of the company in the last 12 months
Speak to a specialist today
Getting advice as early as possible can put you in a much better position and provide some peace of mind. Get in touch to discuss your situation.