When people in
Darwin come to me planning to discuss Bankruptcy,
they are always packed with questions. The internet is full of information, but
far too much of it is baffling or contradicts itself, so I make it my mission
to try and make it clearer. One of the most general matters is 'Will I lose my
business if I declare bankruptcy?' The brief answer is no. If you are a manager
of a company any shape or size you can keep your business if you want to. In
Darwin, businesses that end up being insolvent have a few options for instance,
liquidation, voluntary administration and so on. It's people who go bankrupt
not companies.
Bankruptcy is a
complex area so get some skilled advice on this if you have a business.
Generally speaking, the financial obligations in a business and personal debts
go hand in hand when a business owner goes bankrupt. There are some essential
implications for directors of companies when it pertains to Bankruptcy in
Darwin: A bankrupt can not be a director of a company, so if you have a pty ltd
company you will definitely need to retire as a director as soon as you're
bankrupt.
A constraint
that applies when you are bankrupt as a business owner is that you can be in
your own business as a sole trader only. There are things you will need to
reveal as a part of that but basically you can still run your business. For
some business owners, bankruptcy impacts their ability to run the business
because of the licensing issues. For 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 comes to licenses and Bankruptcy in Darwin.
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
business, then go bankrupt and afterwards open the doors the next day like not
a thing had happened. There are laws in place to stop what is called phoenix
companies appearing out of the ashes of an old company.
Having said
that, it's just a point of talking with the suitable people about Bankruptcy.
In this circumstance you may think you need a liquidator for your business, and
you may be right, but bear in mind that every liquidator is different 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, I believe that giving generic advice in this area is likely
perilous as it can have very significant implications for directors and
business owners. This is considering that it is just one of those cases where
what the right advice for one business owner is the incorrect advice for the
other. There are some fundamentals however, that you may benefit from. There is
no restriction to the size of the business you run while you are bankrupt. You
can employ staff. You can constantly deal with your manufacturers 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 uneasy about what you can and can't do
as a business owner, just get the right advice ... If you would like to learn
more about what to do, exactly where to turn and what questions to ask about Bankruptcy,
then feel free to consult Bankruptcy Advice Darwin on 1300 879 867, or visit
our website:bankruptcy-advice.com.au/Darwin
