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Insolvency Advice

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INSOLVENCY ASSISTANCE

It’s easy to get confused when it comes to insolvency, as the term is often thrown around when referring to a business or person running out of money.
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WHAT IS CORPORATE INSOLVENCY?

When a company is unable to pay all debts when they are due, then it’s considered insolvent. It’s quite easy to see how this happens. For nearly every business, the financial model is quite simple. Money is earned through cash and revenue, and it’s then paid out through expenses and outgoings.

It’s important that the money going out never exceeds the money coming in, or the company can run into problems. Debts start to accrue, whether as a result of unpaid salaries, owing taxes or unpaid bills. Then, the business becomes insolvent.

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CATCH THE PROBLEM EARLY

If a business is going into debt, then there’s a good chance you’ll be able to identify some of the early warning signs. Once these have been identified, you can start to put strategies in place to turn the operations around and possibly save the company. While it’s not always possible to return the business to normal operations, there’s a good chance that insolvency can be avoided.

The key is taking action as soon as the initial signs of trouble start to appear, instead of leaving the issues to fester over time. Doing so is only going to be detrimental to you, your business and your employees. It’s important to note that company directors have an obligation to seek advice and stop trading whilst the business is insolvent, in order to avoid personal exposure.

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FAQS

How long does a Personal Insolvency Agreement last?
Unlike bankruptcy, which generally lasts for 3 years and 1 day, a PIA lasts until the terms of the agreement have been met. When all creditors have been paid the amount stipulated in the agreement the trustee will lodge a notice with AFSA confirming the PIA has been completed.
When can I be a director, alternate director or secretary again?
When all the terms of the agreement have been satisfied, as confirmed by the trustee, you are able to be a secretary, director or alternate director again. If your company intends to reappoint you, they must lodge a Form 484 with ASIC.

OUR ADVISORY SERVICES

At Corporate Lifeline we have an array of services to cater to any phase your business is in financially.
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