Ezy Debt Solutions
For free and friendly advice call:
0433 690 051
We can help you take control of your Debts and regain your Financial Freedom.
Is your business or company struggling ?
Being a Director of a struggling company can carry some very serious implications for the Directors if certain actions are not carried out.
An insolvent company is a company that is unable to pay its debt as and when they fall due, for example, they do not have enough cash to meet the company’s running expenses for payment on time.
It is similar to that of a person who becomes bankrupt, at some point in time they do not have the assets or income to meet their liabilities.
How can I tell if my company is insolvent?
One of the main warning signs that your company could be insolvent is if :
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The company is having financial difficulty
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The company is suffering from ongoing losses
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The company has a poor cash flow
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The company has difficulty in obtaining finance
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The company has unpaid creditors outside of the creditor’s terms for payment and the company does not have enough liquid assets to pay its creditors.
What should I do?
Given the serious consequences of insolvent trading, if you believe that your company may be insolvent, we recommend that you speak to us as soon as possible.
EZY Debt Solutions facilitates the finest of insolvency specialists who can provide you with guidance and direction on the steps to take, and assist you mitigate Insolvency and its legal repercussions. If you have any questions, give us a call today.
Please call our office as a matter of urgency on 0433690051 and we will happily provide you with an obligation-free consultation and a fixed-fee quote.
ARE YOU A DIRECTOR OF AN INSOLVENT COMPANY ?
What happens if my company continues to trade whilst insolvent incurring further debt?
As a director of a company there are various duties that are imposed under the Corporations Act 2001 (Cth).
There are several consequences that can be imposed upon director’s who’s company has been trading whilst insolvent. The first of these are known as ‘Civil Penalties’. Civil penalties are in essence a fine but not under criminal law. This means that you will not receive a criminal conviction but will be required to pay a sum of money.
These fines can be significant with the maximum penalty being $200,000.00. These issues are prosecuted by the Australian Securities and Investments Commission.
In addition to Civil Penalties, proceedings can be commenced against directors personally for the payment of compensation for the losses suffered by creditors. There is no maximum liability for these claims and these are in addition to the Civil Penalties that a director may be ordered to pay.
A director can also face criminal charges where the director has been found to have acted dishonestly when trading whilst insolvent. These penalties can include a fine of up to $220,000 and imprisonment for up to five years.
With such severe consequences a possibility for directors of companies, it is crucial that financial advice be sought to ensure that a company remains solvent and does not slip into insolvency. If on the other hand you believe that your company is insolvent you should seek immediate legal advice about your options and to ensure that you do not expose yourself to liability.
If you require any legal advice on insolvent trading or the options available to you if you believe your company is insolvent, do not hesitate to call us.