Amongst the most significant inquiries we get whenever it comes to Bankruptcy is if you may lose your business if you declare bankruptcy. The short answer is no, you are unlikely to lose your business except if you need to.
When it relates to Bankruptcy, if you are a manager of a company any kind of shape or size you can maintain your business if you wish to, often a failing business can pressure an individual into insolvency, so because of those situations it may be best to let the business go. In Melbourne, businesses that become bankrupt have a number of choices like liquidation, voluntary administration and more. So keep in mind that it is individuals who declare bankruptcy not companies.
Bankruptcy is an intricate area so obtain some professional recommendations on this one, especially if you have a business. Generally speaking, the monetary liabilities in a business and personal debts go together when a business owner declares insolvency.
Are you a company Director?
Certainly there are a few essential ramifications for directors of companies when it refers to Bankruptcy in Melbourne: if you are bankrupt you can not be a director of a company – so this means that if you have a pty ltd company you definitely will be required to retire as a director as soon as you’re insolvent.
For some business owners, insolvency effects their capacity to operate the business because of the licensing issues. For instance,, if you manage a building company, your license will be put on hold once you’re insolvent and as a consequence you can not trade without that license, so ensure you are asking about the right inquiries when it comes to licenses and Bankruptcy in Melbourne.
However if your business is not affected directly by such concerns, then you’ll need to restructure the way you operate your business. There are considerations when and if you go bankrupt as a business owner: you can not acquire heaps of debt in your business, then go bankrupt and subsequently open the doors the following day like not a single thing had occurred. There are laws in place to put a stop to what is named phoenix companies showing up out of the ashes of an old company.
Having said that, it’s just an issue of consulting with the right people about Bankruptcy. For instance, some of the most common presumptions is that you require a liquidator. However most of the time you are going to find out this from a liquidator who stands to gain a big payment- so be careful with precisely where you acquire advice from and be careful about people who might have their own agendas.
An important point to bear in mind with Bankruptcy is to be cautious of general or simplistic approaches to your business and Bankruptcy because each business is likely to be unique, and if you are not wary there might be some significant implications. Commonly the right advice for one entrepreneur is the incorrect advice for the other. There are some basics however, that you may benefit from. There is no obligatory reduction in the size of your business when you are insolvent. You can continue to employ and find new personnel. And you can continue to deal with your distributors under certain circumstances, the main one being you will need to meet the payment terms agreed upon in light of your bankruptcy.
So when it comes to Bankruptcy, don’t get overly confused regarding what you can and can’t do as a business owner, just get the recommendations that is right for your scenario. If you wish to find out more about what to do, where to turn and what questions to ask about Bankruptcy, then do not hesitate to speak with Bankruptcy Melbourne on 1300 795 575, or visit our website: www.bankruptcymelbourne.com.au.