Bankruptcy, insolvency and business recovery
Businesses can struggle in difficult and good times. This can be caused by such things as economic cycles, failure of a large customer or a change in the market, which can be impacted by various external factors. Take the restrictions on trade imposed due to the COVID-19 pandemic as an example.
Failing to recognise or ignoring that the business is struggling puts its continued operation at risk, leading to insolvency.
What is insolvency?
If a business can’t pay its debts as they become due, it is deemed to be “insolvent”. This can be temporary or permanent.
The result can be:
Bankruptcy – for a sole trader or partnership
Liquidation – for a company
Signs that a business is struggling include:
Being unable to pay bills on time
Getting paid late or not at all
Being unable to take a salary from your business
Suppliers opting to only provide stock on cash terms
Receiving demands for payment
Hitting borrowing limits
Missing BAS, and or superannuation guarantee payments
Not lodging tax returns
How do you avoid losing your business?
It is essential to keep good business records and regularly review the with your business advisers.
Additionally, it is recommended to:
Act early when you have a problem. Don’t wait until you have a bankruptcy or winding up application served or you are trading insolvently.
Seek expert advice and act on it. Don’t take notice of family and friends who think they know better or have heard something to the contrary
Give all relevant information to your adviser – don’t hold back.
If you act early and get advice from experienced and expert advisers, you may be able to get your business back in shape. Business recovery strategies include:
Business recovery strategies include:
Improving debtor recovery
Equity and debt raising
Delaying creditor actions
Bankruptcy or business liquidation
Where recovery is not possible or not commercially effective, you will need advice on strategies to deal with bankruptcy and liquidation.
These may include:
Contesting creditor demands
Contesting statutory demands
Appointing a receiver
Appointment of a liquidator or trustee
Avoiding/ contesting actions for unpaid liabilities
Greenhalgh Pickard’s solicitors and accountants can provide expert and professional advice about business recovery and insolvency matters. They understand the need for accurate commercial advice and fast action when personal or business finances are at risk.
Their lawyers and accountants can also provide strategic tax advice, assist you in negotiations and where necessary representation.
Greenhalgh Pickard’s Bankruptcy, Insolvency and Business Recovery Team
Legal & Accounting Full Service Sunshine Coast Law Firm
Greenhalgh Pickard Solicitors and Accountants is an innovative, full service, Queensland law firm and accounting firm with 3 convenient law offices on the Sunshine Coast. Our clients predominantly live and work on the Sunshine Coast but we've many clients also located throughout Queensland, interstate and even overseas.
With accounting and law firm offices in Caloundra, Kawana and Coolum Beach, Greenhalgh Pickard Solicitors and Accountants takes pride in being trusted legal guides and financial business accountant advisers to clients everywhere.
Whether you wish to make a Will, Enduring Powers of Attorney or Advanced Health Directive, need assistance to administer an estate, require a Binding Death Benefit Nomination, or you're planning on contesting a will. Lawyers from Greenhalgh Pickard can help.
What is Elder Abuse? Elder Abuse is a complicated and emotionally sensitive area of law. Let's talk about it. Often victims of Elder Abuse are either, unaware that the actions against them constitute as elder abuse in the eyes of the law, or are too fearful...
Do you know your rights in a situation when Police attempt to search you or your property? Consenting to a police search You don’t have to consent to a police search. If the police ask you if you consent to a search, you can say ‘no’....
Everyone wants to be a business owner, capitalising on cash flow and quantum leaping into the lifestyle that comes with being your own boss. However, whilst this may sound like the natural progression for many tradies, there is plenty to consider...
"Woohoo! I'm getting a tax refund!" It’s the news we all want to hear because, let’s face it, no one wants a tax bill! So what’s the best way to use your tax refund? Before you race off to the shops and spend it all, consider some smarter ways to use your tax refund...
When the Federal Budget was announced in May this year, there was some news which made low and middle income earners smile – the decision to extend the tax offset for the 2021/22 financial year. The Low and Middle Income Tax Offset (LMITO) helps low and middle income...
In 2022, the Government is set to launch a new reporting scheme, targeted at stopping sharing-economy participants from skipping their tax obligations. What is the sharing economy? As described by the ATO, the sharing economy is economic activity through a digital...
Contact Your Nearest Office
If you are interested in meeting with an accountant or lawyer regarding your business or commercial interests, please fill out the form to book an appointment or call (07) 5444 1022