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FAQ

Frequently Asked Questions

  • In most cases, company debts remain with the company. However, directors can be personally liable in certain situations — such as unpaid PAYG withholding, superannuation, GST, or where director duties have been breached. Getting advice early is critical.

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  • If your business is struggling to meet obligations as they fall due, it may be considered insolvent. Continuing to trade while insolvent can increase personal risk for directors. Speaking with a registered liquidator early can help clarify your options and next steps.

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  • No. Many businesses close for reasons outside a director’s control. Closing a company properly and in accordance with the law is often the most responsible decision and helps protect you from future issues.

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  • Insolvent trading occurs when a company incurs debts while unable to pay them. Australian law places obligations on directors to prevent this. Early advice can help reduce risk and ensure decisions are made appropriately.

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  • Creditors, including the ATO, may take action in certain circumstances — particularly for unpaid tax or superannuation. Each situation is different, which is why tailored advice is important before matters escalate.

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  • The timeframe depends on whether the company is solvent or insolvent and the complexity of its affairs. Some closures are relatively straightforward, while others require a more formal process. We explain the likely timeframe upfront.

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  • In most cases, no. Many directors go on to successfully operate new businesses after closing a previous one. Handling the process correctly is key to avoiding long-term restrictions or issues.

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  • Employee entitlements such as wages, leave, and redundancy must be considered. In some cases, the Fair Entitlements Guarantee (FEG) scheme may apply. We help directors understand their responsibilities clearly.

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  • Once all debts and obligations are satisfied, any remaining funds may be distributed to shareholders in accordance with the law and company constitution. This must be done correctly to avoid disputes or compliance issues.

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  • The earlier, the better. Even if you’re unsure whether formal action is required, an early conversation can provide clarity, reduce stress, and help prevent small issues from becoming serious problems.

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