What is an Insolvency Company?

An insolvent company is one that is unable to pay its debts when they fall due for payment. The three most common corporate insolvency procedures are: voluntary administration, liquidation and receivership.

What is insolvent trading?

Insolvent trading is the law under the Corporations Act section 588G that says that if a company is insolvent and a director allows the company to incur a new debt, then the director can be personally liable for the new debts incurred.

My company is in liquidation. Is bankruptcy the next step?

While bankruptcy can result once a company is in liquidation, it isn’t always the case. However, it is more likely if you have personally guaranteed the debts that are owed by the company. In this situation, creditors may reserve their right to recover the debt from you personally. The liquidator may also pursue you for [...]

When is a company director liable for the debts of the company?

The company director is usually not liable for the company’s debts unless they have personally guaranteed debts, have an expired Director Penalty Notice from the Taxation Office (prior to when an administrator has been appointed), they have been found guilty of insolvent trading, or owe certain personal liabilities.