What happens when a corporate trustee of a trading trust goes into liquidation? Here we look at the current state of the law and the uncertainty around the power of liquidators in this situation.
Is your business struggling? Are you losing significant market share or are your margins too small? What next?
Simplified debt restructuring is a new process available as of 1 January 2021 to support financially distressed small businesses. In simplified debt restructuring, an independent professional known as a ‘small business restructuring practitioner’ is appointed to a distressed debtor company to assist with restructuring the company’s debt via development of a ‘restructuring plan’.
In this article, we look at the definition of ‘unfair preference’ claims — a mechanism used by liquidators to claw back some prior payments to creditors. We also look at the available defences for an unfair preference claim, and how the new ‘simplified liquidation’ procedure for small businesses deals with unfair preference claims.
Wage theft is the underpayment of employees. Wage theft can occur in a number of ways, for example underpaying wages, not granting entitlements or refusing to pay penalty rates, superannuation, overtime or commissions.
An important part of the personal bankruptcy process in Australia is the ability of those overseeing the process to ‘examine’ the individual undergoing bankruptcy or any other relevant person. This is the ability to question that person or those persons, under oath, about their financial affairs, fraud or involvement with the bankrupt. This power is contained within section 77C of the Bankruptcy Act 1966 (Cth) and is sometimes known as a ‘private examination’.
Having creditors is a necessary element of business. But those lines of credit extended to your business do not come without some reciprocal obligations. Respecting your creditors should always be a priority. It is vital that you maintain a strong creditor-debtor relationship, even as situations change and become more difficult.
Be careful who you hire to help you with your problems and make sure they share the same commitment to your business as you do!
The reality for small businesses in financial strife is that turnaround consultants do not want to turn your business around.
Starting a business can be a mystifying process. It involves overcoming complex and seemingly never-ending challenges that can be frustrating to navigate and sometimes will not lead to a quick return. As such, when considering whether to begin such a difficult undertaking, it is immensely important to clarify some of the ideas surrounding starting a business.
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?
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.
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.