Amongst the biggest questions we get when it comes to Bankruptcy is if you can lose your business if you go bankrupt. The short answer is no, you are not likely to lose your small business except if you need to.
When it relates to Bankruptcy, if you are a manager of a company any kind of shape or size you can retain your business if you wish to, often a failing business can push a person into bankruptcy, so in light of those scenarios it could be best to let your business go. In Newcastle, businesses that become insolvent have a number of choices like liquidation, voluntary administration etc. So keep in mind that it is individuals who declare bankruptcy not companies.
Bankruptcy is a complex aspect so obtain some professional advice on this one, especially if you have a business. Generally speaking, the financial debts in a business and personal debts go together when a business owner declares insolvency.
Are you a company Director?
Certainly there are a few essential implications for directors of companies when it concerns Bankruptcy in Newcastle: if you are insolvent you can not be a director of a company – so this means that if you have a pty ltd company you definitely will need to stop working as a director as soon as you’re insolvent.
For some business owners, insolvency impacts their ability to operate the business due to the licensing matters. For example,, if you run a building business, your license will be put on hold once you’re insolvent and as a consequence you can not trade without that license, so ensure you are asking the right inquiries when it comes to licenses and Bankruptcy in Newcastle.
Having said that if your business is not impacted directly by such concerns, then you’ll want to reorganize 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 financial debt in your business, then go bankrupt and after that open the doors the following day as if not a single thing had happened. There are laws in place to impede what is called phoenix companies showing up out of the ashes of an old company.
Having said that, it’s just an issue of seeking advice from the right people about Bankruptcy. For instance, one of one of the most common assumptions is that you need a liquidator. However most of the time you are going to be told of this from a liquidator who stands to earn a significant commission- so take care with exactly where you acquire guidance from and be careful about other individuals who might have their own agendas.
An important point to remember with Bankruptcy is to be careful of general or simplistic techniques to your business and Bankruptcy due to the fact that each business is going to be diverse, and if you are not careful there can be some substantial ramifications. Often the right advice for one business owner is the incorrect tips for the other. There are a few essentials nonetheless, that you may benefit from. There is no mandatory reduction in the size of your business when you are insolvent. You can still recruit and find new staff. And you can continue to deal with your distributors under certain circumstances, the main one being you will need to satisfy the payment terms agreed upon taking into account your bankruptcy.
So when it comes to Bankruptcy, don’t get too overwhelmed about what you can and can’t do as a business owner, just get the help that is right for your scenario. If you would like to learn more about what to do, where to turn and what concerns to ask about Bankruptcy, then do not hesitate to speak with Bankruptcy Experts Newcastle on 1300 795 575, or visit our website: www.bankruptcyexpertsnewcastle.com.au.