Are You Aware About Various Consequences of Company Liquid
If you have a business set up and due to some reason, you have come under serious financial difficulties then you need to consult a liquidator for your company liquidation.
However, before you discuss with any company liquidators Melbourne, it is essential that you must be aware about all the consequences that you have to bear after the liquidation of your company.
Following are few of the key things that you must understand before taking your decision however, it will be better to consult with the experts too.
Your personal assets will remain protected
If you are a director of the company, then you have certain limited liability with regards to your company debt. Therefore, your personal property will remain untouched due to your decision, particularly if your debts are unsecured one.
It will lead to bankruptcy
Also, as a director of your company, legally you are distinct from the company.
So, even in case your company is unable to pay various debts from the company resources, then either you or any other directors, or shareholders need not pay for all those debts personally.
Your company alone will be held responsible for not paying these debts. Therefore, there is no fear of becoming bankrupt, if your company gets liquidated due to any reason. Though there are few exceptions, you need to discuss with an expert.
What you can expect out of liquidation of your company?
In Australia liquidation is considered as just one among the three options for insolvency available for companies.
Out of these options, typically liquidation is considered as most straightforward process to declare insolvency, and also winding up of any business operations. Following are few things you need to follow after liquidation.
- Creditors voluntary liquidation
While declaring voluntary liquidation, director and shareholders will initiate the process. If they do not appoint a liquidator, then the creditor can go to the court and legally appoint a liquidator.
- An independent and registered liquidator will be hired
Regardless of liquidator appointed by the court or shareholders, they will work as neutral and independent agency for creditor’s benefit.
- The liquidator will conduct an investigation about the company
Along with company director and other responsible persons of the company, the liquidator will try to work to get proper understanding about assets of the company and also liabilities.
They will check various transaction, financial statements and many other information to decide the actual reasons for insolvency condition.
- Legal action can be taken against director(s)
Those cases where actions of directors of the company have really contributed to such failure of the company, then penalties or legal action may be initiated against all the company directors.
- All company assets will be collected
The entire inventory of the corporate assets will first be created, and these company assets will then pass into legal control of liquidator after that.
- Creditors may make also claim to liquidator for their outstanding debts
The liquidator will pay to all secured/unsecured creditors who have claim for debts that was incurred by the business.