When a company becomes insolvent and cannot pay due debts, it must be legally dissolved by an independent professional. The process of winding up a company, while protecting the interests of employees, creditors and shareholders, can be performed by a liquidator or voluntary administrator.
Voluntary Liquidation and Administration
Creditors and company shareholders can implement a voluntary liquidation. Company directors can enter voluntary administration. If the company fails to voluntarily engage with external administrators, creditors are able to initiate a compulsory liquidation of a company through a Statutory Demand. The appointed independent liquidator or voluntary administrator will oversee the process until the finalisation of the liquidation or administration. The insolvency practitioner’s principle objective is to preserve and realise the company’s assets and distribute any surplus to creditors.
This will provide the directors with a legal and compliant solution to their company’s predicament. The Australian Corporations Law provides directors with a second chance while working with a registered liquidator who is qualified to administer and complete the tasks that lead to an orderly and fully legal conclusion. Once a company is in liquidation, all phone calls and correspondence will be directed to the liquidator’s office, therefore relieving the stress of dealing with creditors who cannot be paid.
As soon as a company becomes insolvent, Menzies Advisory should be contacted. When it is recognised that a company is no longer financially viable, its legal or accountancy team should engage a liquidator and ensure the director ceases all trade activities. We offer compassionate, solution-driven and efficient services to organisations throughout Victoria and Queensland.