Voluntary administration is a process where a registered insolvency professional temporarily takes control of a business which is insolvent, or in financial difficulty. This professional, the ‘voluntary administrator’, takes away control from the directors, for a period of time, in order to assess the finances and determine the future of the business.
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.
Voluntary administration rarely results in a good outcome for the business – or its creditors. The end result is usually the winding up of the business as a going concern, and ‘next-to-nada’ for the creditors.
What effect do the changes to commercial tenancy arrangements brought in to combat the financial impact of COVID-19 have on SMEs?
In article: The COVID-19 economic meltdown has already led to some quick changes to Australian bankruptcy and insolvency law. However, as the basic tools for dealing with insolvency remain the same, it is worth looking at the general regulatory landscape…
Business owners need to be realistic about the collectability of invoices and be ruthless with cutting expenses to deal with a potential economic depression. They also need to look to the future and pivot their business strategy because the world has changed.
This article will consider the right of employers to temporarily stand down staff because of the COVID-19 pandemic.
The new Coronavirus Economic Response Package Omnibus Act 2020 (the Coronavirus Economic Response Act) has just come into force. This Act contains a range of new measures to support businesses through the Coronavirus/COVID-19 pandemic and its consequences.
How do we determine if a construction company is insolvent? Insolvency, as defined under Section 95A of the Corporations Act 2001 (Cth), occurs when a business or an individual is unable to meet their debts as they become due and payable.
The existing policy-settings for insolvency law need some serious alteration. The threat of ‘terminators’ means too often directors are subject to the ‘stick’ of the law. A better system would provide positive incentives, ‘carrots’, for directors and their accountants and lawyers, to turn companies around.
A receiver must be an independent and suitably qualified individual. This means, in nearly all cases, that the receiver must be a registered liquidator and satisfy a range of other requirements that apply to receivers.
A payment plan negotiated with the ATO can provide a legal and manageable way to respond to an overwhelming tax debt.