|March 7, 2017||58|
Amongst the biggest questions we get whenever it comes to Bankruptcy is if you can lose your business if you go bankrupt. The short answer is no, you are probably not going to lose your small business except if you want to.
When it relates to Bankruptcy, if you are a manager of a company any shape or size you can maintain your business if you want to, typically a failing business can push an individual into insolvency, so because of those circumstances it may be most ideal to let the business go. In Australia, enterprises that become insolvent have a couple of alternatives like liquidation, voluntary administration and so forth. So keep in mind that it is individuals who declare bankruptcy not companies.
Bankruptcy is a complicated aspect so obtain some qualified advice on this one, particularly if you have a business. Generally speaking, the financial liabilities in a business and personal debts go together when a business owner declares insolvency.
Are you a company Director?
There are a few essential implications for directors of companies when it pertains to Bankruptcy in Australia: if you are insolvent you can not be a director of a company – so this implies that if you have a pty ltd company you absolutely will be required to retire as a director as soon as you’re bankrupt.
For some business owners, bankruptcy effects their capability to operate the business because of the licensing matters. For instance,, if you manage a building business, your license will be suspended once you’re bankrupt and as a consequence you can not trade without that license, so make sure you are asking the right inquiries when it comes to licenses and Bankruptcy in Australia.
However if your business is not impacted directly by such concerns, then you’ll need to restructure the manner in which you run your business. There are factors to consider when and if you go bankrupt as a business owner: you can not acquire loads of debt in your business, then go bankrupt and subsequently open the doors the next day like not a single thing had happened. There are laws in place to put a stop to what is known as phoenix companies showing up out of the ashes of an old company.
Having said that, it’s just an issue of talking to the right people about Bankruptcy. As an example, amongst the most typical assumptions is that you really need a liquidator. But most of the time you are going to be told of this from a liquidator who stands to make a large commission- so take care with where you obtain advice from and be careful about other individuals who could have their own agendas.
An important point to bear in mind with Bankruptcy is to be cautious of basic or simplistic techniques to your business and Bankruptcy due to the fact that each business is likely to be different, and if you are not vigilant there could be some significant implications. Often the right guidance for one entrepreneur is the wrong tips for the other. There are a few essentials nonetheless, that you may benefit from. There is no obligatory reduction in the size of your business when you are insolvent. You can continue to recruit and hire new employees. And you can continue to deal with your distributors under certain conditions, the main one being you may need to meet the payment terms agreed upon because of your bankruptcy.
So when it comes to Bankruptcy, don’t get overly confused about what you can and can’t do as a business owner, just get the assistance that is right for your situation. If you would like to learn more about what to do, where to turn and what questions to ask about Bankruptcy, then don’t hesitate to speak with Bankruptcy Experts on 1300 818 575, or visit our website: www.freshstartsolutions.com.au.