Corporate Insolvency


If your company is unable to pay its bills on time, experiencing cashflow problems or coming under pressure from its creditors, it may be insolvent. The Corporations Act imposes various duties on persons in charge of companies, including an obligation to make sure that the company does not trade, and incur more debt, while it is insolvent. A controller of a company who allows it to trade while insolvent can be made personally liable for the company's debts.

However, there are options available to a company in financial difficulty. Please contact us if you would like more information in relation to any of the matters discussed below.

Voluntary Administration

Many directors of companies in trouble leave matters until it is too late to address the problems. If your company is facing financial stress, Fryer Insolvency may be able to help you identify ways out of the difficult situation and to save your business.

One such method is voluntary administration. When a company is in financial difficulties it may be appropriate to appoint an insolvency practitioner to take control of the company's affairs for a brief period. The voluntary administration process allows for a temporary freeze on the company's debts while the administrator assesses the situation. That period, of a handful of weeks, can provide breathing space for the company and allow its directors, working with the administrator, to explore ways to save the company's business, including the jobs of its employees.

Liquidation

When a company is hopelessly insolvent, or the directors and shareholders simply no longer want to continue to operate the company's business, liquidation of the company may be the most appropriate course. The job of a liquidator appointed to a company includes the realisation of its assets, payment of its creditors from available funds, and effecting the orderly winding up of the company's affairs.

If you would like to discuss your options in relation to the administration or liquidation of your company, please contact us.