Responding to liquidation

Ultimate Guide to Liquidation Part 3: Responding to liquidation

Estimated reading time: 32 minutes

Sometimes, no matter what a director has done to try and avoid a liquidation, it will loom on the horizon as the only option when a business is no longer viable. There is nothing left to do but to get out of the building before it sinks into an oozing puddle. But in that situation, directors still need to know: what things should they take on the way out or avoid doing?

Preparing for Liquidation

The Ultimate Guide to Liquidation Part 2: Preparing for Liquidation

Estimated reading time: 44 minutes

The terms ‘liquidation’ and ‘winding up’, just like the terms ‘bankruptcy’, ‘tax office’ and ‘new season of Married at First Sight’, carry a degree of anxiety. But they shouldn’t. Liquidation, or the ‘winding up’ of a company, can happen for many different reasons: it does not necessarily mean that the business is broken beyond repair.

What is Liquidation?

Ultimate Guide to Liquidation Part 1: What is Liquidation?

Estimated reading time: 33 minutes

It has been evident for a long time that Australia’s ‘one-size-fits-all’ liquidation model is inappropriate for SMEs. This inadequacy has become particularly evident in the wake of the COVID-19 related economic turbulence.

Safe harbour from insolvent trading

Navigating the insolvency safe harbour: Complete guide for SMEs

Estimated reading time: 32 minutes

The safe harbour is a carve-out to the duty of company directors to cease trading when a company is insolvent. It is a pro-business mechanism that helps companies stay afloat by giving directors protection from prosecution for insolvent trading while they work on a restructure. Read our guide to the safe harbour to find out more about this potential lifeline for insolvent companies.

Ilustration of zombie companies chasing cash

Zombie Companies: Is your business walking dead? Complete Guide for SMEs

Estimated reading time: 32 minutes

A zombie company is a business that barely scrapes by and is always short of cash. The problem with zombie companies is that they can be easily tipped over the edge into insolvency when something goes wrong. Read our article to learn more about the signs, symptoms and consequences of zombie companies.

Insolvent trading

Insolvent Trading: Complete Explanation for SMEs

Estimated reading time: 29 minutes

The prohibition against insolvent trading is a duty of all company directors to prevent their company from trading (i.e. incurring debts) while insolvent. It is illegal for a director of a company to allow an insolvent company to continue to trade, while having reasonable grounds for suspecting insolvency. The consequences can be serious: read our guide to find out more.

Trading trusts - complete guide

The Complete Guide to Trading Trusts for SMEs

Estimated reading time: 33 minutes

A trading trust is a trust over goodwill and business assets with the trustee being the legal person responsible to creditors. A trading trust is usually a discretionary trust whose trustee is a company, that is used to trade for the benefit of the beneficiaries. As with a non-trading trust, a trading trust separates legal ownership of assets from beneficial ownership and control. The controllers of the business are the owners and their family who exercise a controlling mind through their appointment as directors of the trustee company.

Insolvency Revolution for SMEs

Insolvency Revolution for SMEs: Australia’s new ‘debtor in possession’ restructuring procedure

Estimated reading time: 9 minutes

The Government is using its currently massive political capital to push through a revolution in SME insolvency law in Australia. Their aim is to make the insolvency process less draconian for small businesses and, in the long term, encourage a more entrepreneurial culture. The changes foreshadow streamlined and genuine debt forgiveness outside of voluntary administration.

Pre Insolvency Advisers

What do Pre-Insolvency Advisers do for SMEs?

Estimated reading time: 50 minutes

Pre-insolvency advisers are professionals who help business owners to conduct a root cause analysis to understand why their business is failing and then help them to develop a turnaround strategy (i.e. what to do next) or if this is not possible, plan an orderly winding up.

phoenix activity accounting

The Complete Guide to Illegal Phoenix Activity

Estimated reading time: 42 minutes

Illegal phoenix activity — the ‘re-birth’ of a business in new corporate feathers to avoid its obligations — has been a major concern of regulators in Australia for the last 25 years. In this ultimate guide we explain everything you ever wanted (and didn’t want) to know about phoenix activity in Australia.

Offshore tax havens image

Offshore Tax Havens: A Guide for Australian Investors

Estimated reading time: 29 minutes

Offshore tax havens are the jurisdictions of choice for building corporate structures to protect assets from creditors and hide the identity of ultimate beneficiaries. This article should be of interest to any professional advisor interested in understanding the nuts and bolts of setting up an offshore corporate structure.