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Company Liquidation In the Media

Banned Liquidator Unearthed at Raided Pre-Insolvency Firm

Surprise raids on a Melbourne based Pre-Insolvency firm conducted by the ATO and ASIC has discovered a banned liquidator allegedly working under an alias according to an article appearing in today’s Sydney Insolvency News.

Apart from furthering its investigations into the practices of  untrustworthy pre-insolvency advisors, the article goes on to say the AISC & ATO raid may also have uncovered a significant tax fraud involving:

  • the backdating of directorship resignation forms on advice from the Pre-Insolvency firm; and
  • the insertion of a new director by the Pre-Insolvency adviser who would later place the company into liquidation

It seems “the ATO is looking at how a $25,000 debt owed to it by a small computer repairer morphed into $488,000 in PAYG arrears.

ASIC says “Don’t Risk it with Untrustworthy Advisers”

With the focus turning on untrustworthy Pre-Insolvency advisers, the ASIC believes it is best for all involved to used qualified, reputable and licensed persons when it comes to Insolvency and Liquidation.

As the ASIC Commissioner said  ‘… business advisers will be held personally responsible for knowingly providing advice to clients that causes their clients to act illegally’. That means, if the client performs an illegal act, it will be as though the business adviser did that act.

Categories
Insolvency

Pre-Insolvency Adviser Convicted & Sentenced

This press release highlights ASIC’s continuing war on Pre-Insolvency business advisers who offer advice to companies in financial distress. The bottom line is that business advisers must give lawful advice or they will be held personally responsible for the illegal actions of their clients.

Business adviser guilty of aiding a director’s breach of duty

An ASIC press release says a Pre-Insolvency adviser who provided business advice to directors of struggling companies was convicted and issued a fine. Investigations conducted by ASIC found the adviser provided assistance that resulted in a director dishonestly using his position to conceal company assets from an appointed Liquidator.

A business adviser has been found guilty of dishonestly aiding or counselling a director to breach their director duties under the Corporations Act.

The press release says that in following the pre-insolvency adviser’s advice, the director had attempted to prevent the Liquidator from having access to the company assets and to retain the benefit of those assets for himself, rather than the creditors of the company.

Read the full ASIC media release here.

Advice from Unlicensed and Unregulated Advisers – ASIC says Don’t Risk it with Untrustworthy Advisers

ASIC Commissioner Greg Tanzer said ‘… business advisers, are trusted to give advice that is lawful and in the best interest of their clients…This outcome … sends a clear message to business advisers and other gatekeepers that they will be held personally responsible for knowingly providing advice to clients that causes their clients to act illegally’.

Apart from being convicted and fined, the adviser has also been disqualified from managing a corporation for a period of five years.

Categories
Insolvency

ATO & ASIC Raid Pre-Insolvency Firms

The war on unregulated and unlicensed Pre-Insolvency advisers is gathering pace with 120 ATO, ASIC and Federal Police raiding businesses and homes across Melbourne and on the Gold Coast.

According to the linked article, the authorities are concerned that unregulated Pre-Insolvency firms are advising clients on how to avoid paying tax.

ATO and ASIC raid “pre-insolvency” firms allegedly encouraging phoenix activity

According to a recent press release by Smart Company, a raid of 13 properties linked to “pre-insolvency” firms allegedly found them to have been in some way encouraging phoenix activity.

The raid was linked to 2 specific Pre-Insolvency firms that have not as yet been named. The specific issues being targeted involve allegations of encouraging and facilitating tax avoidance, GST evasion, and “phoenix” activity.

Phoenix activity involves the transfer or sale of assets (at undervalue or for no consideration whatsoever) from one company to another.

Usually, the company selling or transferring its assets is hopelessly insolvent and has debts that far exceed the value of its assets.

The Company receiving the assets is usually, but not always associated with or under the control of the old directors. The purpose of the transfer is to remove the assets and relieve the failing company from having to pay its creditors.

The ATO and ASIC believe “pre-insolvency” advice can relate to “how to phoenix a company”. Such transactions are illegal and may result in directors being jailed.

Warning for your business

The peak Insolvency body, ARITA says small and medium businesses should seek advice from qualified practitioners if their businesses encounter financial trouble.

Regulation and qualification is all important as the ASIC representative says many pre-insolvency advisers don’t have much experience, and they may give advice that goes against the law.

Categories
Company Liquidation

Business Liquidation – There are Benefits

One of the biggest decisions you will ever make is whether or not to liquidate your business.

Have you done everything to try and save it? Is there a way to improve sales? Can you cut costs further? Can you put any more money in to keep things going? Should you sell your house and invest in the company? Is there a purchaser or an investor that might get you out of trouble? Should I borrow more from family and friends? Are these questions swirling around your head and keeping you awake at night?

We know they are! The stress of a failing business is immense. The cost of trying to battle on can affect your health and the well-being of your family. For many, it is more than they can stand.

The fact is, sometimes business liquidation is inevitable.

It may come as a surprise that while business liquidation may hurt, it actually has a number of important benefits to directors.

1. Business Liquidation allows a clean break from the past

You’d be surprised the number of times directors say “I have been battling with these problems for the past 2 years. The stress has cost me my health and my family” or “If I had known this sooner, I wouldn’t have lost everything by putting it into a failing company. I should have done this a long time ago”.

It’s perfectly normal to fear the unknown but everything you need to know will be explained to you by The Insolvency Experts so that you understand exactly what to expect from business liquidation. With that information, you’ll be able to make a fully informed decision as to what is the best course of action for you, your family and your financial future.

2. Stop harassing letters & phone calls from creditors, debt collectors, lawyers and the ATO

The moment business liquidation starts we notify the creditors. Instead of chasing you, their focus is shifted onto the Liquidator.

So right from the start, you won’t have to deal with anymore angry phone calls. We will take care of everything to do with the company while you get on with your life. And if a creditor does call you, simply refer them onto the liquidator.

3. Outstanding debts are written off

Mounting debt is incredibly stressful particularly when there is no way to trade out of the problem.

Once a business is in liquidation, all debts incurred by that company, including amounts owed to the ATO, are written off and/or dealt with in the liquidation process.

The reason is that the company is a separate legal entity at law. The company is not the director and this means the director is not personally liable to pay the debts of the company. There is no reason for a director to sell personal assets to pay the debts of a company.

Unless a creditor has a personal guarantee, they have no legal right to seek repayment from you. This means that business liquidation will free you of the creditors you have been trying to placate.

You can move on and focus your efforts in building your future.

4. Placing your business into liquidation will avoid or minimise exposure to Insolvent Trading Claims

If a director allows a company to continue to trade and incur credit without a reasonable expectation that the debt will be repaid when it falls due, the director may be liable for an Insolvent Trading claim.

Directors of failing businesses that trade past the point when a reasonable person would have stopped trading are breaking the law.

Not only can they lose personal assets to an Insolvent Trading Claim, but in the worst cases, they can even lose their liberty. By placing a business into liquidation at the appropriate time, these risks may be avoided.

5. Legal action is halted

As soon as business liquidation commences, all legal claims against the company must stop.

Section 471B of the Corporations Act prevents any person from commencing or continuing with legal actions against the company without first seeking a Court order to do so.

6. Employee Entitlements may be paid through a Government Scheme

Many directors battle against impossible odds trying to trade on so they can pay their employees.

While this is a noble attitude, it’s a little misguided.

Most directors don’t know that if their company doesn’t have sufficient assets to pay employees, there is a government scheme known as the Fair Entitlements Guarantee Scheme that will respond to employee claims.

FEG will pay unrelated employees most of their unpaid entitlements including wages, annual leave, payment in lieu of notice and redundancy if they have lost their jobs due to insolvency.

7. Avoid Personal Liability for Company Tax Debts

The ATO can hold a director personally liable for certain Company tax debts by issuing a Director Penalty Notice.

The good news is that you can avoid that personal liability through business liquidation provided that you act quickly and you meet the criteria.

8. Lowest Cost Business Liquidation Experts

The Insolvency Experts are the lowest cost company liquidation professionals throughout Australia.

We have over 25 years of experience and have dealt with hundreds of people in your exact situation so we know exactly what needs to be done.

We understand placing your business into liquidation can be daunting, but we are here to help you. If you ‘re in financial difficulty and don’t know where to find honest and practical advice, then call us. We have a Free 24-hour Helpline answered by a qualified Insolvency Expert.

Call Today on 1300 767 525

 


Disclaimer
This article is not to be construed as legal advice but is presented for information and research purposes only. No guarantee implied or expressed is given in respect of the information provided and accordingly no responsibility is taken by The Insolvency Experts or any member of the company for any loss resulting from any error or omission contained within this article.

Categories
Bankruptcy

Business Bankruptcy in 2 Simple Steps

You’re probably reading this because you’re totally stressed by constant creditor harassment. Perhaps you’re stressed because you realise the business is now insolvent and your worried that if you allow it to continue operating, you may be jailed for trading while insolvent.

Perhaps you’re at a complete loss as to what you need to do to fulfill your duties as a director and you need some professional guidance as to what is required to bring the company to a close.

Stressed, Being Hassled, Don’t Know What To Do?

When people are stressed, they need genuine help and information that will allow them to make a fully informed decision. They also need someone that will help them make the process of business bankruptcy as easy as possible.

We are the experts in the area of business bankruptcy and Voluntary Liquidation. Because of our experience, we have streamlined the process to make it as simple and stress free as possible for you.

Whether your company is large or small, we will provide you all the documents and help you every step of the way.

2 Simple Steps to Business Bankruptcy

  • Firstly, we need to hold a directors meeting.

At this meeting, the directors formally recognize the business is insolvent. For that reason, the law requires a meeting of the shareholders/members to be called. They are the ones that will decide the future of the company.

  • Secondly, the shareholders meet and pass a resolution that places the company into liquidation.

At this point that business bankruptcy begins.

The meeting of the shareholders follows the meeting of directors and can take place on the same day provided that 95% of the shareholders agree to waive the 21 day notice period required of the Corporations Act.

Do you need Help with Business Bankruptcy?

If you are facing business bankruptcy, The Insolvency Experts will provide you all the documents needed to ensure your company is dealt with quickly, correctly and lawfully as required by s.491 of the Corporation Act investigate this site.

Because we understand the immense stress associated with a business failure, we have simplified the process to make it as easy as possible for you. We will provide you with the draft minutes of both the Directors’ and Members’ meetings. We will also provide you the necessary ASIC forms and other document templates that will make listing all your creditors details as simple and easy as possible.

We recognise business bankruptcy can be daunting and we have worked hard to make the process as simple and stress free as possible. If that sounds good, and you are also after the lowest cost company liquidation throughout Australia, call us today on our Free, 24 Hour Helpline -1300 767 525.


Disclaimer
This article is not to be construed as legal advice but is presented for information and research purposes only. No guarantee implied or expressed is given in respect of the information provided and accordingly no responsibility is taken by The Insolvency Experts or any member of the company for any loss resulting from any error or omission contained within this article.

Categories
Taxation

The ATO Thinks It’s Going Soft

The ATO has issued a consultation paper in which it is proposing changes to penalties for small business and individuals.

In an on-going effort to encourage people to be willing participants in the tax system, the ATO is looking to soften its approach to the application of penalties for situations where there has been a failure to take reasonable care or a failure to lodge various returns on time.

While the ATO describes this as a “softening” in their approach, it is limited to one chance only for the first error and late lodgment. The ATO says that if the community supports the proposed changes, it will have the following rules

  • It will be available to small business with less that $2 million turnover, and to individuals with eligble “clients” being informed of the one time opportunity
  • It will not be available to clients who have a history of recklessness or dishonest behaviour or who do not engage with the ATO during audits or reviews
  • The ATO will indicate that normally a penalty would apply, but not on this occassion
  • The ATO will explain to the client how the error occurred and how they are to deal with the situation in the future to get it right
  • After a three to four year period, the one chance opportunity would reset
  • If the client does not lodge on time after the one time opportunity, fines and penalties will apply

If you want to read the proposal paper, click here

If you need help or assistance with your tax debt, call The Insolvency Experts 24 hours a day on 1300 767 525 for genuine advice, provided free of charge, and without obligation.

 

 


Disclaimer
This article is not to be construed as legal advice but is presented for information and research purposes only. No guarantee implied or expressed is given in respect of the information provided and accordingly no responsibility is taken by The Insolvency Experts or any member of the company for any loss resulting from any error or omission contained within this article.