Can a Wind-Up Notice be Revoked?

A wind up notice is a notice served by creditors, usually the Australian Taxation Office (ATO), to a company that has not been able to pay its debts. When a business receives a wind-up notice, under section 459E of the Corporations Act, they must appear in court with creditors to begin the proceedings to wind up the company and repay the outstanding debt owed.

Challenging a Wind-Up Notice

A business may successfully challenge a wind-up notice by:

● Filing evidence of solvency

You can challenge the notice under section 465C of the Corporations Act by filing evidence of solvency. Wind up notices are served after a statutory demand and you have not paid the required debt within 21 days. As a result, the court and your creditors will assume your company is insolvent. If you are able to demonstrate otherwise, you may be able to oppose the notice. You may also need to provide evidence of why you did not comply with the statutory demand. The type of evidence you need will vary and includes information on your business’s financial position and liquidity.

● Showing that creditors are more likely to be paid if the company is not wound up

You may potentially be able to convince the court that your business can repay its debts if the winding-up notice was challenged. Evidence will need to be provided that your business can trade successfully so that your debts can be repaid.

● Showing that creditors oppose your business being wound up

On the day of the hearing, the court will take your creditors’ opinions into consideration, as well as other stakeholders. For example, the court may not make a winding-up order if it would negatively impact the business’s unsecured creditors.

● Notify if there is a voluntary liquidation in progress

The court generally sees no difference between a court-ordered winding up or members’ voluntary liquidation. Hence, if a voluntary liquidation is in progress, the court will not order the company to be wound up.

If you successfully oppose your wind-up notice, the court will rule to not wind-up your business when the court date arrives.

If you would like more information on company liquidations or how to restructure your business to reduce financial stress then please contact CRS Insolvency Services. Our consultants are all highly trained in corporate insolvency assignments. We will provide professional advice to help you make the best decision for your company while avoiding personal liabilities. Contact CRS Insolvency Services on 1800 210 073 for 24/7 free expert advice now.