Company Liquidation in Australia
Company Liquidation in AustraliaUpdated on Tuesday 30th October 2018
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Company liquidation in Australia takes place when a business can no longer pay the debts it owes to its creditors or when the founding members jointly decide to end its activities.
There are two types of liquidation, voluntary or official and an intermediate phase, called company administration, which is not essentially a liquidation process but rather an attempt to save the company. When the company is dissolved and liquidated, it will also be removed from the Business Register.
Our team of lawyers in Australia has worked with companies in financial difficulty and has strived, in each case, to find the most suitable solution to this process.
What are the liquidation types?
Company liquidation in Australia can be voluntary or mandatory. Below, our attorneys in Australia describe the existing types:
- - voluntary member’s liquidation: when the members of a company are the ones who freely decide to terminate the business.
- - creditor’s voluntary liquidation: when the liquidation is appointed by the director and the shareholders for the purpose of paying the debts to the creditors.
- - official liquidation: when the termination of the company is ordered by the Court;
- - provisional liquidation: when the Court grants a period of assessment and appoints a liquidator.
It is important to note that the member’s voluntary liquidation can commence when the company is solvent. One of our lawyers in Australia can give you more details on when this process is preferable.
When is liquidation needed?
Liquidation can be a suitable solution to terminate a business that is insolvent. In fact, it can help protect the company director from personal insolvency.
A company that enters into liquidation transfers the management of its assets to an appointed liquidator who will then handle the process of distributing the owed amounts to the creditors and then, if any remain, to the shareholders.
How can a team of attorneys in Australia help?
A team of Australian lawyers can help with adequate counseling when choosing the appropriate type of liquidation and during the process. Our attorneys can help company directors not only understand the needed steps but also how and if the liquidation affects their personal credit ranking.
For more information about liquidation, please do not hesitate to contact our law firm in Australia.