Brooke BirdBrooke Bird

The team at Brooke Bird are experts in providing guidance to businesses facing financial difficulty.

Businesses

With years of experience across a diverse range of industries, our team are driven to navigate affected parties towards the best solution possible, while maintaining the confidence of stakeholders; including banks, company directors, creditors and regulators.

As the partners at Brooke Bird are Registered Liquidators with ASIC, they can accept appointments from directors, shareholders or on behalf of creditors through the Supreme Court of Victoria or the Federal Court of Australia.

Our expertise:

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I have received a Director Penalty Notice from the ATO.

If you have received a Director Penalty Notice from the ATO, you may become personally liable for the debts of the company. The Notice will detail how to avoid personal liability. This often includes:

  • having the company quickly wound up (liquidation),
  • appointing a Voluntary Administrator
  • paying the amount owing; or
  • comply with a repayment plan agreed to by ATO. If the repayment plan is not completed, you will be automatically personally liable for any shortfall

You have a very limited time to respond to the Notice. It is critical that you make an appointment with Brooke Bird to seek immediate professional advice if you are in receipt of such a Notice.

The Notice is required to be sent to the director’s personal address based upon the records maintained by the Australian Securities and Investments Commission.

What are director’s duties?

The director of a company has a legal duty to remain on-top of the company’s financial position. This includes maintaining books and records, taking steps to ensure the business remains solvent to the best of their ability and addressing any solvency concerns by seeking professional advice in a timely manner.

What is insolvent trading?

Insolvent trading is when a director knowingly incurs new debts when the company is insolvent. When this occurs, a director can become personally liable for these new debts.

Am I personally liable for my company’s debt?

If you are a sole trader, you are personally liable for any financial issues related to your business. However, if you comply with all of your legal obligations as a director of a company, the company is liable for its own debt.

If you fail to fulfil your duties as a director, both civil and criminal action can be taken against you personally and you may also be ordered by a court to pay compensation to the company or creditor.

What is a personal guarantee?

A personal guarantee is a written promise from a business owner or company director that guarantees payment on a lease or loan in the event that the company cannot pay. In the event of where a debt is not paid a creditor can seek to obtain the guarantor’s personal assets.

What happens to the employees of an insolvent company?

Employees should be advised as soon as a director knows that a business is being liquidated or being put into voluntary administration. Although this is a difficult situation for an employer to be in, it is important that they are transparent with their employees, and give them the most time possible to consider their future and begin planning their next steps.

Employees have a priority above other creditors when a distribution from a liquidated company is paid.  They can also make a claim on the Federal Government’s Fair Entitlement Guarantee (FEG) to have their entitlements paid quickly in the event of an insolvency appointment.