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Can I start a new business after liquidation?

Can I start a new business after liquidation?

You may think that as a director of a failed company that it isn’t possible for you to start another company any time soon. You can start a new company and act as the director, however, there are some important things you should know before venturing into your next business in order to be prepared and avoid any other forms of insolvency down the track.

ASIC does have the right to disqualify you from acting as a director of a company if within the last 7 years you have been a director of 2 companies that have gone into liquidation and your creditors have received less than 50c on the dollar. This simply means that for every dollar you owe to your creditors, they have received less than 50c. If ASIC feel this is necessary, the disqualification may last up to 5 years. Disqualification can even reach a maximum of 20 years but more modest disqualifications are most likely.

In order to avoid any form of director disqualification, it is best to understand and evaluate what happened with your previous business that led to its insolvency. It is important to be aware that ASIC maintains a register of companies which have been placed into liquidation and the liquidation many also appear on your personal credit file.

To find out more about your options as a director, you need to consult with an insolvency specialist. At 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.

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The Answer to Your Director Penalty Notice

The Answer to Your Director Penalty Notice

As a director embarking on a new business venture, you become assigned a number of
responsibilities. One of the most important is becoming responsible for your company’s taxation obligations.

But what does this mean?

Every Australian business has a legal responsibility to file its Business Activity Statement (BAS) every quarter. If you fail to lodge your BAS within 3 months of its due date, then the company director(s) will become personally liable for the PAYG and superannuation component. To collect these amounts from the director (personally), the Australian Taxation Office, has the power to issue a Directors Penalty Notice (DPN) with a lock down notice.

If your company has lodged its BAS within 3 months of their due dates and the
ATO issues a DPN, then you can avoid personal liability if within 21 days you
either:
– Repay the company’s full outstanding tax debt from their own pocket; or
– Appoint a liquidator to cease company operations; or
– Appoint an administrator to enter the company into voluntary administration.

In order to know which course of action is most suitable as a director, you need to consult with an insolvency specialist. At 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.

https://crsinsolvencyservices.com.au/what-is-a-director-penalty-notice

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What Investigative Powers Does a Liquidator Hold?

What Investigative Powers Does a Liquidator Hold?

When a company goes into liquidation, the appointed liquidator in charge has to complete a minimum level of investigations to determine whether or not there are assets to be recovered for the benefit of creditors.

The liquidator must then compile his or her findings into a report to the Australian Securities and Investments Commission. This is a statutory requirement as stipulated under s533 of the Corporations Act.

Some of the investigations the liquidator must carry out include:

The company’s history
Why the company failed
Report the claims of employees, secured creditors and nature of the debts incurred
If the company traded whilst insolvent
Whether the directors have committed any offences under the Corporations Act and any other possible claims against them
Whether or not the director made any preferential payments to creditors that may be recovered
Whether the director has been involved in a liquidation previously
Whether the liquidator believes that the director should be banned from acting as a director

In addition to these investigations, the liquidator holds other responsibilities such as collecting and realising the company’s assets, overseeing the distribution of the proceeds of realisation and applying for the company to be deregistered once the liquidation process is completed.

If you would like to learn more about company liquidation, then please contact CRS Insolvency Services on 1800 210 073 to speak to our friendly and expert insolvency specialists.

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How CRS Insolvency Services Can Help Relieve Your Company Debt

CRS Insolvency Services are expert insolvency specialists who have years of experience in helping businesses find the most appropriate insolvency solution for them.

So if you are struggling with your company debts, we would like to help you too.

1. FREE initial consultation

At CRS Insolvency Services, we understand that it can be difficult making the first move to help solve your insolvency issues. This is why we offer a FREE initial consultation for everyone who calls our toll-free, 24/7 hotline (1800 210 073). We also offer a FREE initial meeting at our head office in Sydney. If you elect to call our hotline you may wish to remain anonymous until you decide to proceed with a service we offer.

We do this because we want to make sure that we can help and steer you in the direction that is best for you before you make any commitments.

When you call us, you can expect expert advice that is tailored to your situation based on years of experience and knowledge. And everything that is said in the phone call will remain confidential.

2. Find the right option for you

If we believe that we can assist your with your company insolvency, we will explain each of our business debt solutions so that you can gain a thorough understanding.

That way, you can make an informed decision as to which one is the best option for you.

And of course, we will help you make this choice as it can be a very difficult and daunting decision to make.

3. We will see your case from the beginning to end

Once the best business debt solution for your company is identified, we will begin the process in helping you with your company debts with that solution.

We will see your case from beginning to end so you know that you will be working with someone that is familiar with your situation and that you know and trust.

If you are struggling with your company debts, then act immediately. Contact CRS on our 24/7, toll-free hotline for FREE expert advice on 1800 210 073.

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Milk Broking Business Collapses, Leaving Dairy Farmers Drowning in Debt

Dairy Farmers are owed millions of dollars after National Dairy Products (NDP), a Victorian milk broking business, collapsed and went into administration in November 2016.

Creditors are also owed $6.8 million, with allegations that the company was trading whilst insolvent for several months prior to entering administration.

The company’s director Mr Esposito offered creditors $200,000 under a Deed of Company Arrangement (DOCA), to be shared between non-dairy farmer creditors owed money.
Alternative deals were offered to dairy farmer suppliers. They were offered either the full repayment of the book value of what they were owed over 12 months if they supplied the company with milk or full repayment over 18 months if thy suppliers refused to supply the company with further milk supply.

The dairy farmer creditors rejected the deal, saying it was not credible or practicable. Creditors instead voted to wind up the company and place it into liquidation.

The ABC has reported that the directors continue to live in a multi-million-dollar mansion in Melbourne and a luxury lifestyle to suit it – and dairy farmers are not happy.

The liquidators have said that they will now look to publically examine the directors or former directors and will look for any possible recovery action against the directors and former directors.

If you find that your company is in financial trouble, act immediately before it is too late. Contact CRS Insolvency Services for more information on our business debt solutions on 1800 210 073.

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Two Personal Debt Solutions compared to Bankruptcy

If you want to avoid Bankruptcy, then it is best to look for an alternate personal insolvency solution. Here at CRS Insolvency Services, we offer two personal debt solutions which are both worth considering, depending upon your personal circumstances: Debt Agreements and Personal Insolvency Agreements.

Debt Agreement

A Debt Agreement is a formal arrangement between you and your unsecured creditors. We help to negotiate a payment plan in which you propose to pay a certain amount of a period of time. It usually lasts for 3 to 5 years.

The good thing about a Debt Agreement is that creditors will usually accept less than 100 cents in the dollar meaning that you will have to pay less than the total debt. Any remaining balance after the Debt Agreement expires will be written off and no debt recovery action is allowed to be made against you for that amount.

All your debts will be consolidated into one debt so you only have to make on regular payment. Depending on your proposal, this could be weekly, fortnightly or monthly. All interest on your debts will also be frozen and you assets will be protected, meaning you won’t lose them.

Personal Insolvency Agreement

A Personal Insolvency Agreement (PIA) is very similar to a Debt Agreement. Likewise, with a Debt Agreement, a PIA is an arrangement with your creditors in which you pay an agreed sum over 3 to 5 years (usually).

It also means that any interest on debts will be frozen and the remaining balance at the end of the agreement is legally written off.

However, if you:

  • Earn more than >$83,169 (after tax) or >$116,117 (before tax for Australian citizens).
  • Owe more than a total of $110,893
  • Own assets worth more than $110,893 combined

Then you will need to enter into a PIA instead of a Debt Agreement.

To enter into a Debt Agreement, you will need to earn, owe and own less than the amounts stipulated above.

Compared to Bankruptcy

Assets

Under bankruptcy you will most likely lose your assets (unless they are under the statutory limits), whereas with a Debt Agreement or a Personal Insolvency Agreement your assets will be protected.

Income

Under bankruptcy, your income will be assessed annually for compulsory income contributions (link to https://crsinsolvencyservices.com.au/income-contribution-calculator/), whereas with a Debt Agreement or a Personal Insolvency Agreement or income will not be assessed annually and your repayments under each agreement will not change if you get a pay rise.

Contact CRS Insolvency Services on 1800 210 073 to speak to one of our friendly and professional insolvency specialists today.

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Australian Insolvencies Are Set to Increase by 2% This Year. Here Is Why to Avoid Being Part of Those Statistics

It’s bad news for Australian businesses as it is predicted that the number of insolvencies will increase this year.

 

According to Atradius Economic Outlook, there will be a 2% increase in insolvencies, meaning that Australians will be on par with the UK and Canada.

 

In order to avoid being part of the 2% of Australian businesses becoming insolvent, make sure that you keep a close eye on your business’ performance and cashflow. Also, learn to recognise these signs that your business is insolvent or likely to become insolvent.

 

  1. You cannot pay your debts

 

Being insolvent is defined as being “unable to pay your debts as and when they fall due” so if you find that you are struggling to pay your bills one time, then you may already be insolvent.

 

  1. Not paying superannuation fees

 

One of the first go-to sources of money for companies who cannot pay their bills is the employees’ superannuation. This is because these payments are only made quarterly so missed or late payments may go unnoticed.

 

Whilst not paying your employees’ superannuation will help to improve short-term cash flow, it is not solving the core problem of your company’s underlying financial situation. Directors who fail to pay their employees’ superannuation will also become personally liable for the unpaid superannuation.

 

  1. COD terms

 

If your suppliers and vendors are starting to put implement Cash-on-Delivery, then that demonstrates that your suppliers have acknowledge of or suspect that your company is insolvent. If others are starting to recognise it, then you should act immediately and seek professional help.

 

CRS Insolvency Services are the leading corporate insolvency specialists in Australia. We offer 24/7 expert advice on our toll-free helpline. If you would like to speak to a professional, then please call us on 1800 210 073.

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Ozcon Industries Shuts down, Leaving 81 Workers Jobless

81 workers have lost their jobs at Ozcon Industries, with the business shut down after it was placed in voluntary liquidation earlier this year.

 

Ozcon Industries, a steel pipe and welding services supplier, had four sites based in Dalby, Miles and Moomba in Queensland. This family-run, award-winning business had been operating for more than a decade, making an annual turnover of approximately $17 million in the June 2016 financial year.

 

However, due to “significant losses on a number of specialised welding projects” in addition to “the drilling industry downturn across the Australian energy sector”, the company was placed in voluntary administration at the request of the company directors and shareholders.

 

As Ozcon Industries employed many local residents, this will no doubt affect the community.

 

Bill Bryne, Acting State Development Minister, commented, “My message to these workers and their families is: you are not alone.

 

“Ozcon Industries is a private company that makes its own commercial decisions, but government has a critical role to play in times like these.”

 

He also stated that the Government had arranged for Centrelink to provide financial support to the affect families as well as counselling through Lifeline.

 

David Littleproud, a Federal member for Maranoa, echoed this sentiment, stating that he has “alerted human services minister Alan Tudge to make sure our local Centrelink office is fully equipped to also assist those affected.

 

“Ozcon Industries specialised in industrial, mining and resources based-manufacturing and the Federal Government have some large-scale projects in the works. Whether it’s the Warrego highway upgrade or the Toowoomba second range crossing, I’ll work to get these fast-tracked to support those affected by this business closure and get people back into local work.”

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Will I Be Personally Liable for Company Debts?

One of the most common questions business owners or directors ask us is “will I be personally liable for company debts?” There is a reason why this question is asked so often. It is because if a company director is found to be personally liable for debts of their business, then he or she may face serious consequences.

If your company is insolvent or likely to become insolvent, then the company, not you, will become liable to pay the company debts.

In addition, if you, as the company director, have failed to pay your employee’s PAYG withholding and Superannuation Guarantee payments, then you will be personally liable for these company debts. You may also be issued with a Director Penalty Notice ((DPN) by the Australian Taxation Office (ATO). If you have received a DPN, then you must act immediately. You have 21 days to respond appropriately and pay the company debts or the Commissioner of Taxation will hold you personally liable and can face criminal and civil penalties. If you can’t pay the debts you may wish to appoint a liquidator within the 21 day period.

If you are worried that you will become personally liable for company debts, then it is recommended that you speak to a professional for expert advice. CRS Insolvency Services are insolvency specialists who specialise in corporate insolvency appointments. We will provide free, expert advice that is unbiased and based on years of experience. If you would like to seek a free initial consultation, then please contact us on 1800 210 073.

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I’ve Received a Director Penalty Notice. What Does This Mean?

A company director is obliged to pay their employee’s Pay As You Go (PAYG) withholding and Superannuation Guarantee Charge (SGC). It is a director’s legal responsibility to ensure that these obligations are met.

 

However, when a director runs into financial difficulties, then it is common practice that they delay these payments to improve short-term cash flow. These payments are usually made quarterly so it takes time for people to notice that they have not yet been paid.

 

It is important for company directors to know that this can cause them to become personally liable for these payments. This is where a Director Penalty Notice comes into play. If you have not met your legal obligations to pay these amounts, then the Australian Taxation Office (ATO) may issue a Director Penalty Notice (DPN) to the director’s residential address as registered with the Australian Securities and Investments Commissions (ASIC). For this reason alone, it is critical that company directors always keep their residential address details up to date with ASIC, otherwise a DPN may be issued and you will never know about it!

 

A Director Penalty Notice carries serious consequences and so it is important that you take action immediately. You have 21 days to respond from the date the DPN was issued by the ATO and there are different steps that you can take.

 

  1. Pay the full debt; or
  2. Enter an installation arrangement to pay the debt; or
  3. Place the company into Voluntary Administration; or
  4. Place the company into Liquidation.

 

If you have received a Director Penalty Notice and fail to respond appropriately within the 21-day timeframe, then you will become personally liable for the amount stipulated in the DPN notice.

 

To avoid being made personally liable, then please act immediately if you have received a Director Penalty Notice. If you have received one and want professional advice about what to do, then please contact CRS Insolvency Services on 1800 210 073. Our toll-free hotlines are open 24/7 so there will always be someone available to help you.

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