It’s not uncommon for small businesses to experience financial difficulties, whether it’s due to poor management, economic downturns, or unforeseen circumstances. These situations can lead to accumulating debts, especially those owed to the Australian Taxation Office (ATO). If these debts are not dealt with, they can result in severe penalties and legal action.
That’s why it’s essential for businesses facing financial difficulties to seek guidance from pre-insolvency and expert insolvency practitioners. Our experts can offer help with debt management, protecting business assets, and navigating through potential insolvent trading procedures. We can provide tailored guidance to help businesses find the best solutions on pre-insolvency in their specific financial circumstances.
If you’re dealing with corporate tax debt in Australia, call Wisdom Business Consultants today.
What Happens If You Can’t Pay an ATO Debt?
If you’re struggling to pay off your debt to the ATO, seeking advice from pre-insolvency advisors like those at Wisdom can be insightful. We will guide you on the best course of action before your company becomes insolvent or goes into liquidation. Meaning, pre-insolvency refers to the period before this happens.
Pre-Pack Insolvency Process
During this pre-insolvency period, advisors can assist you in exploring various options such as a Company Arrangement or a pre-pack insolvency process, which can help you restructure your debt and preserve the value of your company’s assets.
It’s important to note that these options should be pursued in compliance with insolvency laws and regulations to ensure a fair and legal resolution for all parties involved.
Pre-Pack Liquidation Process
A pre-pack liquidation process involves arranging the sale of a company’s assets after it has gone into liquidation. It’s essential to comprehend the potential effects of any insolvency procedure before making a decision.
Seeking expert advice from a pre-insolvency or insolvency practitioner like our consultants at Wisdom can help you understand the options available to you in order to make an informed decisions that is best for your company’s unique affairs.
Know The Difference Between Pre Liquidation vs Post Liquidation
Choosing pre-liquidation options can be less disruptive to a company and its stakeholders than post-liquidation procedures. This is because post-liquidation procedures can lead to potential job loss and business closure, which can be detrimental to the company’s business and affairs.
Consulting insolvency practitioners from an insolvent company who specialise in the insolvency industry can help you identify the options available to you and make an informed decision that is best suited to your specific circumstances to ensure the preservation of the company’s assets.
Voluntary Administration Process
The voluntary administration process typically involves a voluntary administrator, also known as an independent registered liquidator who will assume complete authority over the company’s assets. This will grant the company director or a third-party pre-insolvency practitioner permission to search for potential solutions to rescue the business assets and operations.
The main goal of the voluntary administrator is to manage the company’s affairs in a way that results in higher payments to secured creditors than if the company had been closed down right away.
When Should You Engage a Pre-insolvency Advisor?
You should engage an advisory pre-insolvency advisor when your business operations are facing financial difficulties and may be at risk of insolvency. It’s important to seek advice as early as possible to give your business the best chance of recovery. Our pre-insolvency advisors at Wisdom can provide guidance on debt management, asset protection, and potential insolvency procedures that may help your business navigate through difficult financial situations and find the best possible solutions for your specific circumstances and related parties.
Below are some warnings that may indicate the need for a for a pre-insolvency advisor:
- Difficulty in paying bills in a timely manner
- Increase in company debt and liabilities
- Problems with cash flow
- Legal action or insolvency notices from the company’s creditors
- Difficulty in obtaining credit
Concerned About a Tax Debt? Turn to Our Pre-insolvency Business Advisors
If you’re worried about your business’s tax debt and corporate entity, turning to pre-insolvency business advisors at Wisdom Business Consultants can help alleviate your concerns. Running a business can be challenging, and one of the most significant challenges that businesses can face is dealing with financial difficulties, including mounting tax debts.
Pre-insolvency advisors at Wisdom can also help you understand the potential consequences of each option, allowing you to make informed decisions about the best course of action for your specific circumstances. Let us assist you in:
- Developing a restructuring plan
- Understanding the ins and outs of trader tax debts
- Protection of business assets
- Negotiations with secured creditors
- Managing insolvency proceedings
Contact Wisdom Business Consultants Today
Don’t let corporate tax debt hold your business back. Our experienced pre-insolvency business advisors are here to offer comprehensive assistance with debt management, protecting your business assets, and navigating through potential insolvent trading procedures. We understand that every business is unique, and our tailored guidance will help you find the best possible solutions for your specific financial circumstances.
Don’t wait until it’s too late – contact Wisdom Business Consultants today and let us help you overcome your pre-insolvency financial challenges.
