Here at CRS Insolvency Services, we understand that the process of filing for bankruptcy can seem difficult and daunting. However, our personal insolvency advisors have helped simplify the process for you.

Here’s what’s required to file for bankruptcy in Australia:

Choosing a Bankruptcy Trustee

There are two options when appointing a bankruptcy trustee.

The first option is to appoint the Official Trustee from the Australian Financial Security Authority (AFSA). If you lodge your application directly with AFSA, the Official Trustee will automatically become your Bankruptcy Trustee.

Otherwise, for your second option, you can choose to appoint a Registered Trustee in private practice. A registered Trustee must be registered by AFSA to accept appointments under the Bankruptcy Act. If you choose this option, you must lodge your application with the Registered Trustee as they will need to sign and attach a Consent to Act with your application.

Completing the Bankruptcy Forms

You will need to complete the following forms before AFSA will accept your application:

• Debtor’s Petition; and
• Statement of Affairs

AFSA may also request certain supporting documentation to support the information provided in your Statement of Affairs.

Here at CRS Insolvency Services, Anthony Warner is our in-house Bankruptcy Trustee if you choose to appoint a Registered Trustee. If you want bankruptcy advice that you can trust call CRS Insolvency Services on 1800 210 073 today.

Here at CRS Insolvency Services, Anthony Warner is a highly experienced insolvency specialist. We assist businesses with our simple, low cost company liquidations. We provide professional advice to company directors who are concerned about the solvency of their companies.

Our team brings you the expertise, knowledge and experience to help you make the right decisions in recognising and dealing with a business under stress. We follow a simple, low cost company liquidation process to help businesses find the most appropriate insolvency solution for them.

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

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 on 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.

Our 24 hours insolvency advice line is FREE of charge and without obligation. We have assisted thousands of Australians with our simple, low cost company liquidation process. If you have insolvency concerns call us now on 1800 210 073.

Liquidating your company is something that many company directors want to avoid. However, if you find that your company is insolvent and your company debts are piling up, then liquidation may be the only solution for you. The decision may seem daunting and challenging, but there are some benefits to liquidating your company that can offer you some relief and peace of mind.

Eliminates risk of insolvent trading

Insolvent trading is when a company continues to trade knowing that their company is insolvent. It is illegal and should a company director be found guilty of insolvent trading, they risk civil and criminal penalties.

As the director, it is your responsibility to take appropriate action when your company is unable to pay its debts as they fall due. By appointing a liquidator on a voluntary basis, you are minimising the risk of insolvent trading and any future claim.

Legal action cannot be taken against the company

When you liquidate your company, creditors are unable to hassle or pursue you or take any legal action against your company. This gives you breathing space to take a moment and explore your options without the constant harassment from your creditors or the added stress of potential legal action.

Peace of mind

Gaining a peace of mind is one of the great benefits of liquidation. It lifts the weight off your shoulders and stops creditors and debt collectors from constantly calling you. While it is sad that your company has come to an end, the benefits of liquidating your company means that you have the chance to start over and build a new company, learning from the financial situation of the previous one.

If you are thinking of liquidating your company, 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.

If you are a director embarking on a new business venture, you are responsible for a number of obligations. One of these obligations is actually understanding the responsibilities of being a company director. This includes the factors that may cause you to get banned from acting as a director for a certain period of time.

There are two main reasons that may cause ASIC to ban you.

1) ASIC Disqualification
According to the Corporations Act (Section 206F), ASIC can disqualify someone from managing a corporation for up to 5 years if they have been an officer of two or more companies that have entered liquidation within the last 7 years. This is part of a broader issue known as phoenixing.

However, ASIC is required to consider the following factors before determining whether or not it should ban someone from acting as a company director. This includes any relationship between any of the companies, making a judgement regarding the person’s conduct in relation to the management of the company; and deciding whether or not the disqualification would be in the public interest.

2) Bankruptcy
If you are a company director who has declared bankruptcy, then you cannot act as a director of any company whilst you are bankrupt. It is worth noting that a typical Bankruptcy period lasts for three years.

We understand that being a company director can be overwhelming. This is why we pledge to make the insolvency process as easy as possible for you. We will keep you informed at all times. We want to help you every step of the way, and that is why we offer free, 24/7 advice on our insolvency hotline. Call now on 1800 210 073.

Who Gets Paid First When a Company Goes into Liquidation?
When a company goes into liquidation, the most common question is what will happen to the assets of the company and in what order do people get paid.

If you are owed money by company which CRS is handling you will be able to keep up to date with the liquidation process by using our creditor portal. We load all reports we issue to creditors onto our website portal so you can view them at a time which is convenient to you.

CRS can handle all types of company liquidations:
1) Creditors’ Voluntary Liquidation;
2) Members’ Voluntary Liquidation; and
2) Court Appointed.

The process to start a liquidation
If your company is insolvent it can be wound up through a Creditors’ Voluntary Liquidation or by the Court. If a creditor is owed money it can apply to the court for a Court appointed liquidator to be appointed. Whilst a Creditors’ Voluntary Liquidation (CVL) sounds like a creditor will initiate the winding up, it is actually initiated by the directors and members of the company.

Who gets paid in a liquidation and in what order?

Secured creditors who hold security over all of the company’s assets are paid first and if there is any surplus after the secured creditor is paid, then the order of payment for the other stakeholders is as follows:

The costs of liquidation;
Priority unsecured creditors (employees); and then
Unsecured creditors.

If you are considering a company liquidation, 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.

Tips for Managing Business Tax Debt

As a company owner, it is essential to be proactive in managing your business tax debt. If you neglect your business tax obligations, it may lead to dire legal consequences. The ATO can issue you with a statutory demand, garnishee order or a director penalty notice. Read below for some tips on managing your business tax debt.

Maintain your financial records
If you are struggling with business tax debt, it is important to maintain accurate financial records. Make sure your cash flow statements and profit and loss statements are updated to reflect your company’s position. This is essential to gain a true understanding, and to plan how to move forward accordingly.

2) Prioritise your business tax debt
Ignoring your unpaid business tax debt will only cause more stress and it will also exposure you to personal liability. Make sure that you continue to lodge your business activity statements on time. Failure to lodge your business activity statements within 3 months of their due date will result in personal liability of the company director.

3) Organise a payment plan
Once you know how much you can afford to pay back on a consistent basis, contact the ATO and organise a payment plan.

4) Consult an expert
If you are still unsure, we assist businesses who are concerned about their solvency and provide professional advice here at CRS Insolvency Services. We are not biased towards an insolvency appointment if that can be avoided. If you would like more information, please call our 24 hour insolvency advice line on 1800 210 073. We offer FREE initial advice.

A Creditors’ Statutory Demand is a formal demand served by a creditor against a debtor company, requiring the debt to be paid within 21 days of service. A creditors’ statutory demand can be served under s459E of the Corporations Act (Cth).

Although it was not designed to be a debt recovery tool, there are dire consequences if a company ignores a statutory demand, as it will trigger the ability for the creditor to commence winding up proceedings against your company.

There are several strict requirements in which a statutory demand must abide by.

The minimum value of a debt to be demanded must be more than (as at the date of publication). This includes any interest on the debt.

The statutory demand must be in the approved form (Form 509H), as per Section 459E of The Corporations Act 2001. This means it must:

• Be in writing;
• Be signed by or on behalf of the creditor; and
• By served at the debtor company’s registered office.

The nature of the debt must not be in respect of unliquidated damages or prospective liabilities.

If you have received a Creditors’ Statutory Demand and you cannot pay the debt you need to consult with an insolvency specialist immediately. 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. Contact CRS Insolvency Services on 1800 210 073 for 24/7 free expert advice now.

What is the difference between receivership, administration, and liquidation?

As a company director, you may have heard of the words receivership, administration, and liquidation but you are not sure about the differences.

There are significant differences between each type of insolvency appointments and they have different consequences for creditors and other stakeholders.

Receivership

Normally, Receivers are appointed by a secured creditor who holds security over some or all of the company’s assets. The Receiver will collect and sell company assets to repay the secured creditor. Their responsibility is to the secured creditor who appointed them and not general unsecured creditors who may also be owed money.

Voluntary Administration

Usually a Voluntary Administrator is appointed by the directors of the company.  This type of appointment is chosen when the company is still trading but has unpaid debts which it cannot pay. The administrator will act for all creditors (even a secured creditor) and will carry out detailed investigations and prepare a report to all creditors.  At the end of the administration process, creditors will be asked to vote on 3 possible outcomes which are explained below:

1. Enter into a Deed of Company Arrangement (DOCA):
   A director can propose a Deed of Company Arrangement which is a formal agreement between the creditors and company to compromise the debts of the company.  The primary goal is for creditors to receive a better return compared to if the company was wound up and placed into liquidation.

1. Enter into Liquidation:
   If no DOCA is proposed and the company is insolvent then the most likely outcome is liquidation.

1. Return control of the company to the directors:
   If none of the above options are passed at the meeting, creditors can resolve to return the control of the company back to the directors.

Liquidation

If a company is placed into liquidation the liquidator will take immediate steps to stop the company from trading and will also sell off any assets. Once the assets have been sold, the liquidator will disburse the surplus funds in accordance with the priorities as set out under the Corporations Act.

If you want to enquire about receivership, voluntary administration or liquidation, please call our 24 Hour insolvency advice line on 1800 210 073.  We offer FREE initial advice.

How do I close my business if it is insolvent?

If you’ve recently become insolvent, closing your business can be a complicated and emotional time. All directors should understand the options and make a decision as soon as possible. Directors have a duty to prevent their company from trading while insolvent as you need to take the interests of your creditors into account. We’ve listed some of those key options if you’re looking to close your business as a result of it being insolvent.

Liquidation

Liquidation is the most direct and efficient way to wind up your company if it has ceased to trade or you want to cease trading. Once you appoint a liquidator, the liquidator will take steps to make sure the business has ceased trading and will then sell the remaining assets. Once the assets have been sold the liquidator will distribute the surplus funds in accordance with the priorities as set out under the Corporations Act.

Voluntary administration

If your company is still trading but it is insolvent (or likely to become insolvent) and you want to try and save it then you may wish to consider a voluntary administration. A voluntary administration is easy to initiate if the majority of the company’s directors pass a resolution to appoint a voluntary administrator.  Once appointed the voluntary administrator will take control of the company and the director’s powers will be suspended.  The voluntary administrator will investigate the company’s affairs and report to creditors on the future of the company.  At this point the directors can put a proposal to creditors for a Deed of Company Arrangement. Usually a Deed of Company Arrangement will set out a proposal to restructure the debts of the company which may involve asking creditors to accept something less than what they are owed. The voluntary administrator will call a meeting of creditors, at which time creditors will be asked to vote on 3 possible outcomes:

1. For the administration to end and pass control back to the directors;
2. For the company to enter into a Deed of Company Arrangement; or
3. For the company to be wound up and placed into liquidation

Receivership

This process can exist simultaneously with voluntary administration or liquidation and it is not a direct pathway to closing an insolvent business. Only a secured creditor or a Court can appoint a Receiver. The Receiver will only protect the interests of the secured creditor who appointed them.

Things to consider

Your company will only officially be closed after it has been deregistered with ASIC.  If you have more than $1,000 owing to creditors or your company has assets you cannot apply to ASIC for it to be deregistered and instead you must appoint a liquidator. After the liquidation has finalised the liquidator, they will apply to ASIC for it to be deregistered.

At CRS we are here to help you and we operate a toll FREE 24 hour advice line. Call now on 1800 210 073 to receive free and impartial insolvency advice today.

With the rise of Australia’s “Start-up culture”, the Australian Government has recently looked at various measures to promote and support Innovation and Entrepreneurship.

Most small to medium enterprises (SME’s) fail within the first three years of operation. This can be due to many reasons such as:

*Lack of working capital

*No Strategic direction

*Poor planning

*Lack of cash flow management

*No record keeping

Due to the Government’s support for business in Australia, the Treasury Laws Amendment (2017 Enterprise Incentives No. 2) Act 2017 (Enterprise Act) was passed in September 2017 and introduced two key inclusions to the Corporations Act 2001 (Corporations Act):

1. Safe Harbour from insolvent trading – This helps provide a legal framework for directors leading to better outcomes for the company and its creditors while providing protection from being pursued personal liability for insolvent trading.
2. A Stay on enforcing rights due to arrangements or restructures –This relates to ipso facto rights in contracts/agreements.

Ipso facto Reforms

Why are these reforms important and what are the effects for parties to contracts moving forward?

Contracts with third parties often what allows its trade, with contracts for suppliers, utilities, and land. Ipso facto clauses allow counterparties to terminate or modify a contract if a company becomes insolvent.

This reform will make ‘ipso facto’ clauses unenforceable while a company is attempting to restructure under:

• voluntary administration;
• scheme of arrangement; or
• a managing controller has been appointed to the company property.

This creates new benefits for the restructuring a company through an insolvency regime and may improve the potential return to creditors by the company getting better value from its assets.

The reforms only affect the rights under contracts, agreements, arrangements entered after 1 July 2018 onwards.

The success of these new provisions will take time to prove their worth in helping businesses take more risk and calculated measures. If you want to know how these reforms may affect you, contact the 24/7 CRS Insolvency Services hotline on 1800 210 073 to receive free and impartial insolvency advice today.