Bankruptcy, insolvency and business recovery

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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:

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Bankruptcy – for a sole trader or partnership
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Liquidation – for a company

Signs that a business is struggling include:

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Being unable to pay bills on time
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Getting paid late or not at all
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Being unable to take a salary from your business
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Suppliers opting to only provide stock on cash terms
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Receiving demands for payment
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Hitting borrowing limits
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Missing BAS, and or superannuation guarantee payments
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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:

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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.
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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
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Give all relevant information to your adviser – don’t hold back.

Business recovery

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:

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Restructuring
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Improving debtor recovery
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Equity and debt raising
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Delaying creditor actions
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Workforce restructuring

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:

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Contesting creditor demands
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Contesting statutory demands
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Appointing a receiver
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Administration
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Appointment of a liquidator or trustee
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Asset protection
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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.

Should you need assistance with navigating your course through bankruptcy or liquidation, call (07) 5444 1022 today to arrange to speak to Greenhalgh Pickard’s experts in this area.

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.

 

 

 

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