When people in
Sydney come to me seeking to speak about Bankruptcy,
they are usually loaded with questions. The internet has lots of information,
but far too much of it is baffling or contradicts itself, so I make it my
mission to try and make things clearer. One of the very most standard troubles
is 'Will I lose my business if I declare bankruptcy?' The concise answer is no.
If you are an owner of a business any shape or size you can maintain your
business if you want to. In Sydney, businesses that eventually become insolvent
have a few options including liquidation, voluntary administration and so on.
It's people who go bankrupt not companies.
Bankruptcy is a
complicated area so get some skilled advice on this if you have a business.
Generally speaking, the financial debts in a business and personal debts go
together when a business owner goes bankrupt. There are a few vital
implications for directors of companies when it comes to Bankruptcy in Sydney:
A bankrupt can not be a director of a company, so if you have a pty ltd company
you definitely will need to retire as a director as soon as you're bankrupt.
A limitation
that applies when you are actually bankrupt as a business owner is that you may
be in your very own business as a sole trader only. Certainly there are things
you will want to make known as a part of that but generally you can still run
your company. For some business owners, bankruptcy affects their ability to run
the business because of the licensing issues. As an example, if you run a
building company, your license will be suspended once you're bankrupt and
therefore you can not trade without that license, so make sure you are asking
the ideal questions when it concerns licenses and Bankruptcy in Sydney.
However if your
business is not impacted directly by such issues, then you'll need to
restructure the way you run your business. There are considerations when and if
you go bankrupt as a business owner: you can not rack up heaps of debt in your
business, then go bankrupt then open the doors the next day like nothing had
happened. There are laws in place to prevent what is called phoenix companies
appearing out of the ashes of an old company.
Having said
that, it's just an issue of talking to the right people about Bankruptcy. In
this circumstance you may think you need a liquidator for your business, and
you might be right, but keep in mind that every liquidator is distinct and have
their own motives. Liquidators earn money from your liquidation - heaps of
money - so what advice do you think you will get?
When it comes to
Bankruptcy, I consider that giving generic advice in this area is likely
damaging as it can have very substantial implications for directors and
business owners. This is because it is just one of those cases where what the
right guidance for one business owner is the inappropriate advice for the
other. There are some fundamentals however, that you may benefit from. There is
no reduce to the size of the business you run while you are bankrupt. You can
employ staff. You can continue to deal with your suppliers under certain
conditions, the main one being you will need to meet the payment terms agreed
upon.
So when it
concerns Bankruptcy, don't get extremely worried about what you can and can't
do as a business owner, just get the right advice ... If you wish to learn more
about what to do, precisely where to turn and what questions to ask about Bankruptcy,
then feel free to get in touch with Bankruptcy Advice Sydney on 1300 879 867,
or visit our website:bankruptcy-advice.com.au/Sydney .
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