Category: FAQ

Can I become personally liable for a debt with the ATO?

If any BAS return is not lodged within 3 months of its due date, then the directors of the company will become automatically liable for the PAYG tax withheld and any unpaid superannuation contributions. The ATO will start its collection process by issuing the director with a “lock down notice”. As soon as a company director receives a “lock down


Why be concerned about a debt with the ATO?

The Australian tax laws were overhauled in 2012. The new laws mean that if any of your company’s BAS have not been lodged within 3 months of their due dates then the company director will become personally liable for the unpaid PAYG tax withheld as well as any unpaid superannuation contributions. Accordingly, company directors now have a real incentive to


How do I know if my company is insolvent?

Some of the most common signs of insolvency include: – Poor Cash Flow – Unpaid or overdue Taxes – Unpaid or overdue employee entitlements – Suppliers stop supplying or demand cash on delivery – Inadequate Company Books & Records If your company is experiencing any of the above, you may be headed towards insolvency. To assess whether your company should


What are the consequences for not keeping proper books and records?

The Corporations Act sets out the director’s duties ‘to keep books and records’. Failure to do so can be disastrous for a company director as it provides a liquidator with a presumption that the company was insolvent from the time that the books were not maintained properly. This means that as a company director you could become personally liable for


What are my options if my company is insolvent?

If you have established that your company is insolvent, you should take immediate steps to ensure that it does not continue to trade whilst it is insolvent. Allowing a company to trade whilst it is insolvent can have serious consequences for a director. Your options may include to: – Close the business by initiating a company liquidation – Keep trading


Why would I voluntarily appoint a liquidator?

If the company is insolvent and unable to pay all of its creditors in full, it should be immediately placed into voluntary liquidation by the company directors. If the directors delay they could become guilty of insolvent trading which has serious implications for the directors. One might also choose to appoint a liquidator when there are serious disputes between directors


What do I do if I have received a Garnishee Notice?

The only way to put a stay on a garnishee is to declare yourself or your company insolvent and enter into a formal insolvency arrangement. For an individual this would take the form of either bankruptcy, or a Personal Insolvency Agreement. For a company, the garnishee notice can be stopped if the company appoints a voluntary administrator. If you have received a garnishee


What is a Garnishee Notice?

If your company is insolvent and having difficulties honouring its tax debts, it is at risk of receiving a garnishee notice from the Australian Taxation Office (ATO). A garnishee notice allows the ATO to directly recover funds for an outstanding tax debt from a person or business. Once the garnishee notice has taken effect, the ATO can remove money from


What is the Difference between Company Liquidation and Administration?

This is one of the most common questions the team at ISA are asked. Liquidation and Voluntary Administration are the two options available to a company encountering irreparable financial distress. The two major differences between liquidation and voluntary administration lay in the level of control held by the company director and the future of the business. Owing to the benefit


How long does it take to complete a Company Liquidation?

The time it takes to complete a company liquidation will vary depending on how complicated the company’s affairs are. There is no set time within which the liquidation needs to be completed and as such, it can range from 12-18 months (for an average sized company that is fairly uncomplicated) to longer (if, say, litigation is needed or other matters



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