Bankruptcy, insolvency and business recovery

Home » Legal » 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:

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

Signs that a business is struggling include:

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

Z
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.
Z
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
Z
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:

Z
Restructuring
Z
Improving debtor recovery
Z
Equity and debt raising
Z
Delaying creditor actions
Z
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:

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

Are you eligible for an unfair dismissal?

Are you eligible for an unfair dismissal?

Employee Protections at work – Know your rights Whether you are an employee or an employer, you need to be aware of your rights and entitlements to ensure you and/or your business are protected. In Australia, the Fair Work Act 2009 (Cth) (the “Act”)...

Splash out before the End of Financial Year!

Splash out before the End of Financial Year!

You’ve only got one week left before EOFY to take full advantage of the tax benefits!   We all know EOFY is next Thursday the 30th of June and can be stressful when it comes to reviewing your business operations, but are you taking advantage of...

How does the 2022-23 Queensland Budget impact your business?

How does the 2022-23 Queensland Budget impact your business?

Key business takeaways from the QLD 2022-23 Budget announcement Payroll tax cuts for small to medium sized businesses, in effect as of July 1. Businesses across Queensland with payrolls under $10.4 million, will receive a payroll tax cut!   ...

Dangerous driving? Penalties to increase.

Dangerous driving? Penalties to increase.

Traffic penalties to increase from July 1, 2022.   From 1 July 2022, high-risk driving behaviour that continues to cause serious injury and loss of life on our roads will face tougher penalties. If you have been charged with any traffic offence, such as drink or...

5 reasons why tax planning will maximise profits

5 reasons why tax planning will maximise profits

Tax planning can help ensure you are maximising your business and its profits.   Whether as an individual or a business, you can reap a lot of benefits from tax planning. And we can help with this to ensure you don’t have any surprises waiting for you at the end...

3 tips for success in starting a business!

3 tips for success in starting a business!

3 tips to start a successful business.   So you’ve been toying with the idea of starting a business. You have the idea, you have the means, so how do I monetise it?  In a saturated marketplace, going out on your own can be extremely daunting....

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