
What Tax advice can assist in insolvency?

One of the major reasons companies fail is that they fail to get the proper tax advice and end up paying more tax than they lawfully are required. Or worse still, when some companies get behind in their taxes they make the wrong calls with catastrophic consequences.
Sometime your tax accountant is not the right person to provide the kind of advice you need? We help with commonsense, objective advice on structuring to ensure that a tax debt to the ATO doesn’t bring your business undone. Free initial advice.
take our free Business Health Check and receive bespoke, obligation free advice suited to your needs within minutes.
Otherwise – click here to book a free appointment, call me anytime on 1300-327123 (till late), or click the chat tool – bottom right corner to instant chat now
To view our knowledge base glossary – for the definition of a term click the following link: Glossary of terms
To view our knowledge base click the following link: Knowledge base
take our free Business Health Check and receive bespoke, obligation free advice suited to your needs within minutes.
Otherwise – click here to book a free appointment, call me anytime on 1300-327123 (till late), or click the chat tool – bottom right corner to instant chat now
Business Asset Protection supplies free initial advice to companies and their directors and individuals.
Typically this includes reviewing your financial positions. A review is especially important where the company or individual is at risk of insolvency.
Insolvency means (more or less) you or your company are:
being unable to pay debts as and when the debts become due and payable.
Insolvency or financial difficulty can occur for a variety of reasons and Business Asset Protection is able to provide or procure a range of financial solutions.
Financial difficulties typically include:
If you’re facing any of the above or another financial difficult or pressure then you need to act.
Even if you just believe that your business risks these financial difficulties in the near future, then you need to act.
To act, we encourage client’s to schedule a meeting at the earliest time to maximise the available solutions to a problem/s.
take our free Business Health Check and receive bespoke, obligation free advice suited to your needs within minutes.
Otherwise – click here to book a free appointment, call me anytime on 1300-327123 (till late), or click the chat tool – bottom right corner to instant chat now
Mark Smith, our principal and key advisor, holds qualifications in both business and law.
Given this, together with his diverse wealth of experiences, in business and life, both in and outside of Australia, Business Asset Protection offers a suite of business law advisory related services across four core division:
Individual services include:
take our free Business Health Check and receive bespoke, obligation free advice suited to your needs within minutes.
Otherwise – click here to book a free appointment, call me anytime on 1300-327123 (till late), or click the chat tool – bottom right corner to instant chat now
Firstly, don’t panic (straight away). Think clearly.
For starters, it is a good idea to understand exactly what a creditor’s statutory demand (“the demand”) is?
Our related blog page is a good place to start? It explains what a demand is in some detail. That blog should be read if this is the first time your business has received such a demand.
But, make no mistake, a creditor’s statutory demand can have very serious consequences.
You, the director, must immediately action it by following the steps as suggested below. Otherwise, in consultation with ourselves, action the demand using our free introductory review.
Once you’ve read this present blog and you know what a creditor’s statutory demand is, the focus moves to what now? What to do next?
But first ….
It’s a useful practice in business to always be considering these pointed questions.
But, they are probably best considered before a creditor’s demand is received. Ideally when or before a debt is incurred.
Our separate blog on good debt practices may also be a helpful place for a business, particular if the director thinks it may be headed for a cashflow squeeze?
Having however incurred a debt, and now having been served with the demand, the director must consider what next?
The questions above are a helpful place to start.
It is critically important, after receiving a creditors statutory demand that the company does not ignore it (and hope it goes away).
Yet some business owners can be embarrassed to discuss these issues with their accountants.
The law provides only a short period after receipt of the demand to take action – so it is critical that action is not delayed.
Business Asset Protection offers a free introductory first session to help a director work through the above and other relevant questions.
Our service is judgement free and focussed very much on solutions to the present problem.
Our available solutions are often more comprehensive than merely negotiating an extension of time to pay the ATO.
Whilst we can often provide tax debt loans, often times a range of other solutions may also be better suited to some clients? These can dramatically simplify your business and give it a fresh start.
If your company has received a creditors statutory demand and is unable to, or unwilling to pay the claimed debt, call us to schedule a free appointment – obligation free – on 1300-327123 (1300-DCP123), click our free appointment scheduling link, or complete the form below.
To take our free Business Health Check click here.
To schedule a free review of your current business structure click the following link: Book a meeting instantly
To view our knowledge base glossary – for the definition of a term click the following link: Glossary of terms
To view our knowledge base click the following link: Knowledge base
For any other questions chat with us now using the live chat icon in the bottom corner of your screen.
To view related blogs, follow the following category links and tags below.
take our free Business Health Check and receive bespoke, obligation free advice suited to your needs within minutes.
Otherwise – click here to book a free appointment, call me anytime on 1300-327123 (till late), or click the chat tool – bottom right corner to instant chat now
The Corporations Act 2001 (“the Act”) provides for the conducting of business by a corporation in Australia.
Section 459E of the Act provides that a corporation may be served a statutory demand by a creditor (i.e. a creditor’s statutory demand) relating to (subsection 1):
(a) a single debt that the company owes to the person, that is due and payable and whose amount is at least the statutory minimum; or
(b) 2 or more debts that the company owes to the person, that are due and payable and whose amounts total at least the statutory minimum.
Once served with such a demand, a company cannot ignore the demand. The most serious of possible consequences for the company are now rolling out. There are no friendly rules or casual arrangements, strict compliance with the demand is necessary by law.
There are further other requirements such as:
(2) The demand:
(a) if it relates to a single debt–must specify the debt and its amount; and
(b) if it relates to 2 or more debts–must specify the total of the amounts of the debts; and
(c) must require the company to pay the amount of the debt, or the total of the amounts of the debts, or to secure or compound for that amount or total to the creditor’s reasonable satisfaction, within 21 days after the demand is served on the company; and
(d) must be in writing; and
(e) must be in the prescribed form (if any); and
(f) must be signed by or on behalf of the creditor.
(3) Unless the debt, or each of the debts, is a judgment debt, the demand must be accompanied by an affidavit that:
(a) verifies that the debt, or the total of the amounts of the debts, is due and payable by the company; and
(b) complies with the rules.
The key words above in each of the subsections are the words Must and AND.
The above requirements of the Act’s provisions are cumulative.
Skip any of the requirements and the consequences for the creditor’s demand is that it is potentially defective.
Once a creditor’s statutory demand has been served upon a company, several things can happen:
If your company has received a creditor’s statutory demand, you have no time to waste. Go straight to our “what to do next blog” for further next steps – click here to book a free appointment, call us on 1300-327123 or complete the form below.
To view related blogs, follow the following category links and tags below.
take our free Business Health Check and receive bespoke, obligation free advice suited to your needs within minutes.
Otherwise – click here to book a free appointment, call me anytime on 1300-327123 (till late), or click the chat tool – bottom right corner to instant chat now
Insolvency in general terms, as it relates to a corporation, is the inability to pay debts as and when they become payable.
A company is also insolvent if it is experiencing an ‘endemic shortage of working capital’ as opposed to a temporary lack of liquidity.
Determining the difference at a point in time during the corporation’s life is a question for a court to determine .
Indicators of insolvency include:
The list is indicative and not exhaustive.
Companies experiencing any or all the above indicators should book a free consultation by clicking here then where we’ll provide you with company specific advice re insolvency in your instance. Alternatively call us on 1300-327123 (till late) or complete the form below.