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Insolvency and Liquidation

At Oldhams Advisory, we specialise in helping small to medium-sized businesses navigate financial difficulty or insolvency. We work to secure the best possible outcomes and mitigate the negative impact that insolvency can have on you both personally and professionally.

Is my business insolvent?

Insolvency is when your business is unable to repay its debts in the required timeframe.

Many businesses may face periods where they have significant debt and reduced cash flow to clear them. Insolvency occurs when it is no longer possible to renegotiate payment of these debts, enter into a debt agreement or secure additional funding to continue operations.

The experts at Oldhams Advisory can conduct an in-depth review and analysis of your business prior to declaring insolvency. Doing this may help provide clarity surrounding your financial situation and may present opportunities for course correction rather than pursuing insolvency.

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What is Liquidation?

Liquidation is the process where the assets of the company are secured and realised by the liquidator. Those funds are used to pay as much of the company’s debt as possible. Usually, the company is unable to pay its debts in full.  

A liquidator such as Glen Oldham would take control of the company and winds up its affairs. The Liquidator acts on behalf of all creditors, we investigate and report to creditors about the company’s affairs. 

The liquidator must also report to ASIC and the creditors on their progress and the outcome of the investigation. Once the affairs of the company have been finalised, the liquidator applies for deregistration of the company from ASIC.

There are two main types of liquidation, which is distinguished by whether the company is insolvent or not.    

Insolvent liquidation

There are two types which is differentiated by how a company enters liquidation:  

  • A creditors’ voluntary liquidation occurs when the company’s directors resolve to appoint a liquidator because the company cannot pay its debts when due.
  • A Court liquidation occurs when a creditor makes an application to court resulting in a court order winding up the company.  

 

Solvent liquidation

Members’ voluntary liquidation occurs when the company’s directors make a declaration that the company can pay its debts in full within a twelve month period. The members of the company resolve to appoint a liquidator. 

Oldhams are specialists in insolvency and liquidation and can provide clarity on the best path forward if your business is unable to pay its debts.

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