If you are in any business that is not doing too well then probably you are planning to liquidate your company, so that you can clear your debt.
In such condition, you may need an insolvency advisor, who can guide you properly to carry out your company liquidation. If you are not too familiar with insolvency then there can be few questions in your mind that you may like to get an answer.
Following are few common questions that you can ask your insolvency advisor before you initiate the process.
1. What is your qualification?
While searching for any doctor or lawyer, normally you would like to ensure that he is a qualified professional and similarly for personal insolvency expert too, you need to know about his qualification, so that you know you are in safe hands.
2. How much upfront fees need to be paid?
Like any professional service, it is important to know the fees and other terms and conditions for making payments. You also should know if there are any hidden charges besides the usual fees.
3. Where can our communication take place and will you maintain privacy?
To discuss about insolvency there will be proper communication with the advisor and that you want to do in confidential manner. Therefore, it is important to know how and where the communication will take place to protect your interest.
4. Have you got membership of any professional body?
Every professional is usually having membership with certain professional organization and insolvency advisors are also no exception to that. Make sure that the advisor is member of ASIC or any other professional body.
5. What is company voluntary liquidation?
Company voluntary liquidation has 2 forms:
- Member’s voluntary liquidation – Where the company may be solvent, but directors have decided to close their business.
- Creditor’s voluntary liquidation – Where the company may be insolvent but directors have decided to liquidate the asset of company to pay their creditors.
6. What is company liquidation process?
To start with the company has to cease their trade, all their assets will be sold off and entire payments are returned to all their creditors as per their distribution order.
It is very simple and precise way to explain the process. In actual practice, lots of steps have to be followed to do it in proper order.
7. How long liquidation process take?
Usually it will depend upon the individual conditions that the company is presently in. Few large companies may take few years while a very small and simple company may need just few months only.
8. Can any company still trade in liquidation?
It is not possible, as company under liquidation will wind up their trading as it can only increase their debs.
9. Can any company survive liquidation?
Generally, any liquidation process will be considered as end of company’s life. However, there are few exceptional circumstances where procedure can be stopped but that is very unlikely.
However, business trading style may be different with different legal entity and its business may continue.