What is insolvency?
Insolvency in general terms, as it relates to a corporation, is the inability to pay debts as and when they become payable.
1 min read
Mark Smith : 17 November 2019 12:59:30 PM
A liquidator is a person appointed, in the winding up of a corporation, to assume control of the company's affairs and to discharge its liabilities in preparation for its dissolution. The appointment of a liquidator may be done voluntarily (by the proprietors) or via the courts (usually upon the application of a creditor - very often the ATO using a creditors statutory demand).
The process of the liquidator conducting the affairs of the company and realising its assets is called liquidation.
The liquidator's role is to ascertain the liabilities (and assets) of the company, convert its assets into money, terminate its contracts, dispose of its business, distribute the net assets to creditors and any surplus (which is rare) to the shareholders and/or proprietors.
The liquidator will extinguish the company, lawfully, as a corporation on the records of ASIC by formal dissolution.
In determining the assets of a company, it is the liquidator's duty to determine whether particular assets under the company's control are owned by the company or others - i.e. stock may be purchased subject to a retention of title, vehicles may be on a corporate hire purchase and secured via a PPSR.
BAP can assist company directors to structure their assets and affairs, if not insolvent, in such a fashion to provide lawful asset protection. To discuss how we can help to structure your company's affairs and assets to provide maximum asset protection, please click here to book an appointment, call 1300-327123 (1300-DCP123), or complete the below form.
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Insolvency in general terms, as it relates to a corporation, is the inability to pay debts as and when they become payable.
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