Creditors’ Voluntary Liquidation
When your company is insolvent, continuing to trade is not an option; a Creditors’ Voluntary Liquidation can help you realise your assets and liquidate them to meet the demands of your creditors. Electing to liquidate your company voluntarily can help to prevent lengthy legal cases and heavy tax penalties.
A Creditors’ Voluntary Liquidation usually begins in one of two ways: one, the creditors agree to proceed with liquidation following a voluntary administration; or two, the shareholders meet and agree to liquidate the company. Both options result in the appointment of a liquidator who realises the assets of the company and reports his or her findings to the Australian Securities and Investment Commission. The liquidator is not required to update the shareholders during the investigation, but may do so upon request.
Upon completion of the liquidation the liquidator will distribute the funds as required by law, in order of: liquidation costs and expenses, employee entitlements, creditors and then members. Each group is paid in full until there is no money remaining. Once the funds are distributed, the company is deregistered and ceases to exist.
SM Solvency Accountants can help guide you through your company’s insolvency and help put you back on the path to financial stability today. Our services come with a free, no obligation initial consultation to ensure that we understand your financial situation and can recommend the best strategy to get you out of debt as soon as possible.