Simplified Liquidation – Financial Distress Solutions

If your business is in financial distress, Simple Liquidation could be the solution. Our experts are here to help guide you with the best independent advice.
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Is your business going through significant financial distress, and you can’t find a clear way out? A Simplified Liquidation is a formal insolvency process introduced by the Federal Government, and it could well be the most suitable option for you.

This innovative procedure aims to reduce the time and costs typically associated with liquidation proceedings, offering assistance to financially distressed Australian small businesses. Falling under the Creditor’s Voluntary Liquidation (CVL) category, this process can be initiated once a company meets specific eligibility criteria (outlined below).

Corporate Lifeline’s liquidation specialists are here to help you find clarity, calm and a clear way out. We are a trusted independent party that ensures compliance with all relevant laws and regulations. Our team of experts, including accountants and insolvency advisers, is here to navigate you smoothly and successfully through this challenge so you’re free to take on the next chapter in your career.

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Simple Liquidation Business Eligibility

This pared-down form of liquidation is available only to companies that meet the following criteria, all of which a Company Director must officially declare:

  • The business cannot pay creditors outstanding monies owing within 12 months.
  • All creditor and employee debts, including terminations, tally less than $ 1 million.
  • The business has met all its taxation lodgement applications and obligations.
  • The business and/or its Director/s have not availed of a Simplified Liquidation in the last seven years.

Professional Business Liquidation Services

Corporate Lifeline provides comprehensive, specialist support and skills you require during this time of financial distress. Our expert team of consultants, accountants and insolvency advisors dig deep to fully understand your business predicament and to unearth the options available.

If the best outcome is liquidating the business, we provide you will the framework and support you need to successfully navigate, understand and complete this process. We’re here for you every step of the way.

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Benefits Of Liquidating a Business This Way

Company liquidation can go down many paths. However, this relatively new concept from the Federal government delivers distinct advantages.

1. Typically costs less than a Creditor’s Voluntary Liquidation.

2. Less administration can lead to faster company wind-up and deregistration.

3. Fewer options are available to creditors to claw back assets, properties, or finances.

4. Can protect Directors from personal liabilities of company debt.

5. There may be opportunities for the company to restructure and resume activities.

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“On 10 December 2020, the Federal Government made changes to Australia’s insolvency framework. As a part of these changes, a new, Simplified Liquidation Process was introduced on 1 January 2021. The new Simplified Liquidation Process is a streamlined creditors voluntary winding up for Companies that have liabilities less than $1 million. Where a restructure is not possible, it is intended to enable small businesses to be wound up faster, enabling greater returns for creditors and employees. The Simplified Liquidation Process will retain the general framework of the existing Creditors Voluntary Liquidation Process, with modifications to reduce time and cost.”

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Simplified Liquidation Process in Australia

The process begins in earnest by appointing a registered liquidator. This role will oversee and assist with the winding up of the business’s affairs. Remember – the Federal government introduced this concept to help small businesses by providing a faster, more straightforward alternative to a traditional liquidation process.

1.

A company is placed into CVL.

2.

If the business is eligible, the company liquidator can choose to adopt the Simplified Liquidation process.

3.

The company liquidator must give all company members and creditors notice of adopting a Simple Liquidation. The notice must be circulated a minimum of ten days before adoption. If 25% of creditors oppose the process, it cannot go ahead.

4.

The company must adopt the liquidation process within 20 days; otherwise, it cannot proceed.

Why Trust Corporate Lifeline As Company Liquidators

  • Your single-stop solution when in financial distress – our team comprises insolvency specialists, accountants, advisers and all the information and support you need to make the best decisions and reach the best outcomes.
  • Your professional partner – our team is committed to guiding and helping you through this challenge, making it as simple and angst-free as possible.
  • We will find the best solutions to protect you and your interests.
  • Third-party impartial operators supported by Top 50 Australian Accounting Firm, Hall Chadwick.
  • Specialist team includes professionals with the highest skills and expertise you need.
  • Nationwide-wide – Corporate Lifeline has teams in every major Australian city.
  • We have already successfully represented and guided hundreds of nationwide clients.
  • Our services come with empathy and without judgement.
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Contact Us About Simplified Liquidation in Australia

This experience doesn’t have to be the full-stop in your career. Corporate Lifeline is here to help make the process as streamlined and stress-free as possible. Let’s meet for a free 30-minute consultation and see how we can help put this behind you so you can look forward to the next chapter.

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Business Liquidation FAQs

These are some of the most common questions we get asked, but if you have more questions, please get in touch and we will gladly help you.

What is Simplified Liquidation?
Simple Liquidation is a more streamlined, pared-down form of Creditor’s Voluntary Liquidation. The Federal government established it following the COVID-19 pandemic to make this process faster, less costly and administratively burdensome for small businesses.
How much does Simplified Liquidation cost?
Simple Liquidation is, in theory, less costly than other more traditional forms of liquidation. However, it still includes several costs, all of which depend on the complexity of the company’s situation, the level of creditor involvement, and the appointed liquidator’s fees. Government fees are also still a factor in determining this final figure.
How is a Simplified Liquidation different to a Creditors Voluntary Liquidation?

These two forms of liquidation vary extensively.

  • Eligibility – a CVL is available to any insolvent company that voluntarily decides to wind up, whilst Simplified is specifically geared to small businesses.
  • Process – CVL is more formal, calls for greater creditor involvement, involves more paperwork and costs and can take longer than Specialised.
  • Costs – CVL costs are typically higher.
  • Goals – CVLs aim to realise company assets and distribute creditor proceeds in an order of priority. They also work to wind up Company affairs fairly and transparently. Specialised aims to also achieve this but in a faster and more cost-effective way.

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