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 need to be resolved). The main factors that affect the time-frame of the liquidation are the structure of the company, its dealing prior to being liquidated and whether it will be necessary to litigate.
You may be thinking that this sounds like a long time to wrap up a company, but there are many tasks that a liquidator must attend to before the liquidation is complete. Many of the time-frames for these tasks are set by the Australian Securities and Investments Commission (ASIC) and are therefore out of the hands of the liquidator.
Some of the tasks a liquidator may need to complete include (but are not limited to):
- Calling meetings of creditors;
- Realising the company’s assets and distributing the funds;
- Collecting the company’s books and records;
- Searching for any assets that may be owned by the company;
- Opening and managing a bank account for the liquidated company;
- Determining and paying the costs and expenses of the liquidation;
- Distributing any surplus funds to the company’s creditors;
- Investigating the affairs of the company and reporting the findings to the company’s creditors;
- Filing statutory records and statements of account with ASIC;
- Filing a statutory report (under Section 533 of the Corporations Act) with ASIC; and
- Lodging Business Activity Statements with the Australian Taxation Office.
In addition, the liquidator must wait for a clearance from ASIC before they can finalise the liquidation. Once they receive this they can call the final meeting of creditors and members of the company, and then complete the process.
As the director of the company, you can help to make the process as smooth and timely as possible by promptly answering any of the liquidator’s queries and requests for books and records.
To better understand the process of a liquidation and the role you play in it, feel free to contact us at anytime on 1800 003 883.