Will I lose my business if I go bankrupt?
Bankruptcy Advice in Australia – Will I lose my business if I go bankrupt?
When people in Australia come to me planning to discuss Bankruptcy Advice, they are always packed with questions. The internet has plenty of information, but far too much of it is confusing or contradicts itself, so I make it my mission to try and make it clearer. One of the most standard problems is ‘Will I lose my business if I declare bankruptcy?’ The concise answer is no. If you are a manager of a business any shape or size you can maintain your business if you want to. In Australia, businesses that eventually are insolvent have a few options for instance, liquidation, voluntary administration and so on. It’s people who go bankrupt not businesses.
Bankruptcy Advice is a complicated area so get some reliable advice on this if you have a business. Generally speaking, the financial obligations in a business and personal debts go together when a business owner goes bankrupt. There are several necessary implications for directors of companies when it pertains to Bankruptcy Advice in Australia: A bankrupt can not be a director of a company, so if you have a pty ltd company you are going to need to resign as a director once you’re bankrupt.
A constraint that applies when you are actually bankrupt as a business owner is that you can be in your own business as a sole trader only. Generally there are things you should reveal as an aspect of that but in a nutshell you can still run your business. For some business owners, bankruptcy impacts their ability to run the business because of the licensing issues. Such as, if you run a building company, your license will be suspended once you’re bankrupt and as a consequence you can not trade without that license, so make sure you are asking the appropriate questions when it comes to licenses and Bankruptcy Advice in Australia.
Having said that if your business is not impacted directly by such issues, then you’ll have to restructure the way you run your business. There are considerations when and if you go bankrupt as a business owner: you can not acquire heaps of debt in your company, then go bankrupt and after that open the doors the next day like absolutely nothing had happened. There are laws in place to prevent what is called phoenix companies popping up out of the ashes of an old company.
Having said that, it’s just a point of talking to the suitable people about Bankruptcy Advice. In this situation you may think you need a liquidator for your business, and you could be right, but remember that every liquidator is unique and have their own motives. Liquidators profit from your liquidation – heaps of money – so exactly what advice do you think you will get?
When it comes to Bankruptcy Advice, I consider that giving generic advice in this area is possibly unsafe as it can have very significant implications for directors and business owners. This is because it is just one of those cases where what the right advice 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 even though you are bankrupt. You can employ staff. You can constantly deal with your distributors under certain conditions, the main one being you will need to meet the payment terms agreed upon.
So when it concerns Bankruptcy Advice, don’t get too uneasy about what you can and can’t do as a business owner, just get the right advice … If you want to learn more about what to do, exactly where to turn and what questions to ask about Bankruptcy Advice, then feel free to get in touch with Bankruptcy Experts Australia on 1300 795 575, we have offices in, Brisbane, Canberra, Sunshine Coast, Sydney, Melbourne, Gold Coast, Adelaide, Perth, Darwin and Hobart. or visit our website: www.bankruptcyexperts.com.au