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Are there any benefits to voluntarily placing my company into liquidation?

If your company is insolvent, or is likely to become insolvent, the natural inclination is to continue trading in the hope that things will turn around. There are, however, many reasons why making the decision to voluntarily place your company into liquidation is a more beneficial course of action.

The first point to make is that you have an actual obligation to place your company into liquidation if it is insolvent. If you are aware that your company is insolvent, or it is likely to become insolvent in the near future, and you continue to trade and incur debts, you can be investigated and penalised. Civil penalties for trading whilst insolvent can reach $200,000, and are only one of many possible consequences, including becoming personally liable for certain debts.Click here to learn more about the consequences of trading whilst insolvent

Voluntarily placing a company into liquidation can give the director a sense of control over the process. It allows them to appoint a liquidator of their choosing, whereas if a creditor forces the liquidation of the company (through the courts), that choice is taken away from them. Making the choice to liquidate can also significantly reduce the stress associated with running an insolvent company – all creditor contact is placed in the hands of the liquidator and the director can rest assured that the company’s affairs are being wound up in an orderly and professional fashion.

If you have been considering placing your company into voluntary liquidation you should seek professional advice. We can help you to determine if your company is insolvent and discuss the potential benefits of making the decision to wind it up. We are available 24 hours 7 days a week on 1800 003 883for free and confidential advice.

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