Insolvency is a complex legal process that can have significant implications for businesses in NSW. Insolvency occurs when a business is unable to pay its debts as they fall due and can result in a range of legal and financial consequences. In these situations, you may need the assistance of our services to navigate the complex legal process and protect your interests.
Insolvency
What are the conditions of insolvency in NSW?
In NSW, a person or company is considered insolvent if they are unable to pay their debts as they become due and payable. There are several conditions of insolvency in NSW that may indicate that a person or company is insolvent, including:
- 1.
Cash flow insolvency: This occurs when a person or company is unable to pay their debts as they become due and payable, even if they have significant assets.
- 2.
Balance sheet insolvency: This occurs when a person or company's liabilities exceed their assets, meaning they are unable to pay their debts even if they sold all their assets.
- 3.
Statutory demand: If a creditor serves a statutory demand on a person or company for a debt of $2,000 or more, and the debt is not paid or disputed within 21 days, this can be evidence of insolvency.
- 4.
Winding up petition: If a creditor or creditors serve a winding up petition on a person or company and it is not disputed, this can be evidence of insolvency.
- 5.
Arrears with the Australian Taxation Office (ATO): If a person or company is in arrears with the ATO and is unable to pay their tax debts, this can be evidence of insolvency.
If a person or company is deemed to be insolvent in NSW, there are several options available to them, including voluntary administration and liquidation for companies, and bankruptcy for individuals.
How can we assist you in insolvency proceedings?
Having worked on a number of insolvency matters for creditors as well as debtors, we understand the process from both perspectives and can provide you independent advice and assist you in the process.
- 1.
Advice on the Legal Framework The first step in any insolvency proceeding is understanding the legal framework. We provide comprehensive advice on the legal obligations and requirements associated with insolvency, including the different types of insolvency processes and their implications. In particular, directors may face personal liability where they are found to be trading a company whilst it is insolvent and so it is imperative that directors understand its obligations.
- 2.
Assistance with Voluntary Administration Voluntary administration is a process that allows businesses in financial distress to restructure their affairs and avoid liquidation. Working with Administrators, we can assist you with voluntary administration, providing advice on the process and guiding you through each step of the process.
- 3.
Representation in Court If a business in NSW is unable to avoid liquidation, it may be necessary to go to court. We can represent you in court, ensuring that your interests are protected and that you receive fair treatment under the law.
- 4.
Assistance with Liquidation Liquidation is the process of winding up a business and distributing its assets to creditors. We assist you with liquidation, providing guidance on the legal requirements and obligations associated with the process, and ensuring that the liquidation is carried out efficiently and effectively.
- 5.
Advice on Debt Recovery Insolvency often involves significant debts, and recovering these debts can be a complex and challenging process. We provide advice on debt recovery, including the legal options available and the most effective strategies for recovering the debt.
Insolvency is a complex legal process that can have significant implications for businesses in NSW. Biz Lawyers and Advisory services can provide valuable assistance to businesses in these situations, helping them to navigate the legal process and protect their interests. From providing advice on the legal framework to representing businesses in court, and assisting with voluntary administration and liquidation processes, Biz Lawyers and Advisory can provide a comprehensive range of legal services tailored to the specific needs of each business.
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