When people in
Australia come to me trying to talk about Bankruptcy,
they are constantly packed with questions. The internet has lots of
information, but far too much of it is confusing or contradicts itself, so I
make it my mission to try and make it clearer. One of the very most typical
worries is 'Will I lose my business if I declare bankruptcy?' The concise
answer is no. If you are a manager of a company any shape or size you can maintain
your business if you want to. In Australia, businesses that are insolvent have
a few options for instance liquidation, voluntary administration and so on.
It's individuals who go bankrupt not companies.
Bankruptcy is a
complex area so get some qualified advice on this if you have a business.
Generally speaking, the financial obligations in a business and personal debts
go together when a business owner goes bankrupt. There are a few crucial
implications for directors of companies when it pertains to Bankruptcy in
Australia: A bankrupt can not be a director of a company, so if you have a pty
ltd company you will likely need to resign as a director after you're bankrupt.
A constraint
that applies when you are actually bankrupt as a business owner is that you may
be in your very own business as a sole trader only. Generally there are things
you will want to make known as an aspect of that but essentially you can still
run your business. For some business owners, bankruptcy affects their ability
to run the business because of the licensing issues. Such as, if you run a
building company, your license will be suspended once you're bankrupt and
therefore you can no longer trade without that license, so make sure you are
asking the best questions when it comes to licenses and Bankruptcy in
Australia.
However if your
business is not impacted directly by such issues, then you'll have to
restructure the way you run your business. There are considerations when and if
you go bankrupt as a business owner: you can not rack up heaps of debt in your
company, then go bankrupt and after that open the doors the next day like
nothing had happened. There are laws in place to stop what is called phoenix
companies popping up out of the ashes of an old company.
Having said
that, it's just a matter of talking with the best people about Bankruptcy. Here
in this situation you may believe you need a liquidator for your company, and
you could be right, but keep in mind that every liquidator is distinct and have
their own motives. Liquidators earn money from your liquidation - heaps of
money - so what advice do you think you will get?
When it comes to
Bankruptcy, I believe that giving generic advice in this area is possibly risky
as it can have very significant implications for directors and business owners.
This is since it is one of those cases where what the right guidance for one
business owner is the incorrect advice for the other. There are some basics
however, that you may benefit from. There is no restriction to the size of the
business you run while you are bankrupt. You can employ staff. You can
constantly deal with your providers under certain conditions, the main one
being you will need to meet the payment terms agreed upon.
So when it comes
to Bankruptcy, don't get too stressed about what you can and can't do as a
business owner, just get the appropriate advice ... If you want to learn more
about what to do, exactly where to turn and what questions to ask about Bankruptcy,
then feel free to speak with Liquidation Service on 1300 795 575, or visit our
website:.liquidationservice.com.au.com.au.
