One of the most significant questions 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 not likely to lose your business unless you want to.
When it relates to Bankruptcy, if you are a manager of a company any shape or size you can retain your business if you want to, often a failing company can push an individual into insolvency, so in light of those scenarios it might be most ideal to allow the business go. In Cairns, businesses that become insolvent have a number of choices like liquidation, voluntary administration etc. So bear in mind that it is people who declare bankruptcy not businesses.
Bankruptcy is a complicated aspect so get some qualified recommendations on this one, particularly if you have a business. Generally speaking, the monetary debts in a business and individual debts go together when a business owner declares insolvency.
Are you a company Director?
There are a few crucial ramifications for directors of companies when it relates to Bankruptcy in Cairns: 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 absolutely will be required to stop working as a director as soon as you’re insolvent.
For some business owners, bankruptcy impacts their capacity to run the business due to the licensing matters. For instance,, if you operate a building business, your license will be put on hold once you’re insolvent and as a consequence you can not trade without that license, so make sure you are asking the right inquiries when it comes to licenses and Bankruptcy in Cairns.
Having said that if your business is not impacted directly by such issues, then you’ll want to restructure the manner in which you operate your business. There are factors to consider when and if you go bankrupt as a local business owner: you can not acquire loads of financial debt in your business, then declare bankruptcy and afterwards open the doors the next day like not a single thing had occurred. There are laws in place to stop what is named phoenix companies appearing out of the ashes of an old company.
Having said that, it’s just an issue of seeking advice from the right people about Bankruptcy. For instance, amongst one of the most common presumptions is that you really need a liquidator. But a lot of the time you are going to be told of this from a liquidator who stands to gain a huge payment- so be careful with where you obtain guidance from and be careful about people who may have their own agendas.
An important point to keep in mind with Bankruptcy is to be mindful of basic or simplistic methods to your business and Bankruptcy because each business is likely to be diverse, and if you are not wary there can be some substantial implications. Commonly the right assistance for one entrepreneur is the incorrect guidance for the other. There are some fundamentals however, that you may benefit from. There is no compulsory reduction in the size of your business when you are insolvent. You can still employ and hire new employees. And you can continue to deal with your distributors under certain circumstances, the main one being you may need to fulfill the payment terms agreed upon taking into account your insolvency.
So when it comes to Bankruptcy, don’t get overly confused concerning what you can and can’t do as a business owner, just get the help that is right for your case. If you want to learn more about what to do, where to turn and what inquiries to ask about Bankruptcy, then do not hesitate to seek advice from Bankruptcy Experts Cairns on 1300 795 575, or visit our website: www.bankruptcyexpertscairns.com.au.