Amongst the biggest inquiries we get when it comes to Bankruptcy is if you will lose your business if you declare bankruptcy. The short answer is no, you are unlikely to lose your small business except if you need to.
When it relates to Bankruptcy, if you are a manager of a company any shape or size you can keep your business if you wish to, often a failing company can pressure an individual into insolvency, so because of those situations it may be better to allow the business go. In Townsville, businesses that become bankrupt have a few choices like liquidation, voluntary administration and so forth. So keep in mind that it is people who go bankrupt not companies.
Bankruptcy is an intricate aspect so obtain some professional advice on this one, especially if you have a business. Generally speaking, the monetary debts in a business and individual debts go together when a business owner declares bankruptcy.
Are you a company Director?
Certainly there are a few crucial implications for directors of companies when it relates to Bankruptcy in Townsville: if you are insolvent you can not be a director of a company – so this implies that if you have a pty ltd company you absolutely will need to retire as a director once you’re bankrupt.
For some business owners, insolvency effects their capability to operate the business because of the licensing matters. For example,, if you run a building company, your license will be put on hold once you’re bankrupt and consequently you can not trade without that license, so ensure you are asking the right questions when it comes to licenses and Bankruptcy in Townsville.
Having said that if your business is not affected directly by such issues, then you’ll need to restructure the way you run your business. There are considerations when and if you declare bankruptcy as a business owner: you can not acquire heaps of financial 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 prevent what is known as phoenix companies appearing out of the ashes of an old company.
Having said that, it’s just an issue of speaking with the right people about Bankruptcy. For instance, among one of the most common assumptions is that you need to have a liquidator. However most of the time you are going to find out this from a liquidator who stands to make a big commission- so be careful with exactly where you obtain recommendations from and be careful about other individuals who might have their own agendas.
An essential point to bear in mind with Bankruptcy is to be cautious of basic or simplistic approaches to your business and Bankruptcy because each business is likely to be diverse, and if you are not careful there can be some significant ramifications. Often the right advice for one business owner is the wrong recommendations for the other. There are some fundamentals however, that you could benefit from. There is no mandatory reduction in the size of your business when you are insolvent. You can continue to recruit and hire new staff. And you can easily continue to deal with your suppliers under certain conditions, the main one being you will need to fulfill the payment terms agreed upon because of your insolvency.
So when it comes to Bankruptcy, don’t get too overwhelmed about what you can and can’t do as a business owner, just get the help that is right for your situation. If you would like to find out more about what to do, where to turn and what concerns to ask about Bankruptcy, then feel free to consult Bankruptcy Experts Townsville on 1300 795 575, or visit our website: www.bankruptcyexpertstownsville.com.au.