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Liquidation

Gold Coast Insolvency

A liquidation is the orderly winding up of a company’s affairs. The three types of liquidation are:

  1. Court ordered
  2. creditors’ voluntary
  3. members’ voluntary (see below)

Court ordered liquidation starts as a result of a Court order, made after an application to the Court, usually by a creditor of the company. A Court may order a company to be wound up and appoint an Official Liquidator to act. Such orders may be made:

  • where the company is proved to be insolvent
  • if the directors have acted in their own interests, rather than in the interests of the shareholders of the company
  • where the Court is of the opinion that the interests of the public, shareholders or creditors are best served by that course of action, or
  • where the Court is of the opinion that it is just and equitable that the company be wound up.

Any one of the following can apply to the Court for the appointment of a Liquidator:

  • the company
  • a creditor
  • a shareholder
  • a director, or
  • the Australian Securities and Investments Commission

The liquidator’s main role is to realise the company’s assets and distribute the proceeds of realisation among its creditors. Where the assets are more than sufficient to meet the claims of creditors, the surplus funds are distributed to the members in accordance with the company’s constitution.

The Liquidator has extensive powers to displace the directors and assumes full control of the company’s affairs. The Liquidator may continue the business of the company to enable the beneficial disposal or winding up of that business.

In addition to realising the company’s assets the Liquidator may:

  • institute proceedings against the directors for insolvent trading
  • have certain transactions entered into by the company prior to the appointment of the Liquidator declared void
  • publicly examine officers of the company
  • seek to recover from creditors amounts which were paid to them at a time when the company was insolvent within the relation back period prior to the commencement of the liquidation

A creditors’ voluntary liquidation is a liquidation initiated by the company. A creditors’ voluntary liquidation may occur either:

  • through the members (shareholders) of an insolvent company resolving to appoint a liquidator to the company, or
  • following a voluntary administration of a company

There are often benefits to those associated with a company in arranging for it to be placed in liquidation, including:

  • it is a way in which a director may avoid personal liability under a Director Penalty Notice issued by the ATO
  • it may limit or reduce the company’s directors’ liability for insolvent trading
  • it may limit or reduce the company’s directors’ liability for certain offences under the Corporations Act 2001
  • it results in an independent person being appointed to the company, who will conduct an orderly winding up of the company’s affairs
  • it avoids the company being placed in liquidation by the ATO or another creditor

Our team of experienced insolvency lawyers can assist you with all aspects of corporate insolvency.

To find out more about what we can offer, visit our areas of law pages or contact our insolvency solicitors for a consultation.

Insolvency Services

  • Personal Pre Insolvency Advice
  • Advice during Bankruptcy
  • Debt Agreements
  • Personal Insolvency Agreements
  • Annulment of Bankruptcy
  • Corporate Pre Insolvency Advice
  • Deed of Company Arrangement
  • Scheme of Company Arrangement
  • Voluntary Administration
  • Liquidation
  • Provisional Liquidation
  • Members Voluntary Liquidation
  • Receivers & Managers
  • ATO disputes
  • Insolvent Trading
  • Director Penalty Notice
  • Corporate Insolvency Litigation
  • Personal Insolvency Litigation

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Marino Law

With more than 60 years experience in all aspects of law, the team at Marino Law believe in putting their clients’ needs first and anticipating the unexpected.

Whether you’re after legal services and advice for business or personal matters, Marino Law will work with you to ensure the process is as seamless as possible.

Liability limited by a scheme approved under Professional Standards Legislation.
 

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  • Suite 6, Level 1, 2481 Gold Coast Highway, Mermaid Beach, QLD 4218
  • PO Box 256, Mermaid Beach QLD 4218
  • (07) 5526 0157
  • (07) 5526 5441
  • info@marinolaw.com.au

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