What is a wind up notice?
Businesses that are experiencing financial hardship and are not meeting their tax obligations or debt repayment terms may receive a wind-up notice. A wind-up notice (typically made under section 459E of the Corporations Act) is a statutory demand that is served by creditors to enforce the payment of debts by a business.
Once a wind-up notice is received, the company is required to appear in court with its creditors to determine the business’s ability to repay its debts and to investigate if the business is solvent. Essentially, a wind-up notice is a test as to whether the business is able to pay its debts and the test is passed if the company makes a serious contribution or repayment offer.
Although a creditor doesn’t have to have a judgement before issuing a wind-up notice, it is best practice as without a judgement the debtor can dispute the notice. If the debtor doesn’t set aside the notice within 21 days it will not be able to dispute the wind-up order at a later hearing.
A notice of winding up isn’t something to be ignored
If a creditor has filed a Notice of Winding-Up in court against your business, then it is necessary for you to take action. If you do not set aside the 459E notice (i.e. the amount owed) within 21 days of receiving the order, the creditor can proceed to the final step and issue a winding-up petition against your company.
And if you have a received a winding-up notice, you need to take immediate action. There are still options available to you after receiving the notice, but with your business being considered insolvent there could be penalties in store for you and your company if you continue trading without addressing the notice.
Have you received a wind-up notice? The sooner you explore your option, the better the resolution could be.
Contact Australian Debt Solvers today by calling 1300 789 499 for a no obligation consultation. We are here to help you and your company overcome or manage your debts and offer a hassle-free service.
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Receiving a winding-up notice means that your creditors are serious about your company paying its debts. This can be very stressful time for directors and it is important to act swiftly to avoid more serious actions.
At Australian Debt Solvers we are here to help you and your company discover the best course of action to take and we provide a quick and efficient service to ensure your business’s financial troubles are dealt with swiftly and as smoothly as possible.
It is important to understand that any business can run into financial trouble and it does not necessarily reflect poorly on you or your business acumen. It is an unfortunate fact that more businesses fail then become successful. Australian Debt Solvers understand this and we strive provide every client with the best service possible in a personable and respectful manner.
What is the process of a windup?
A winding-up notice is among one of the most serious legal actions a limited company can face and you should act quickly if your company receives one.
If the debtor does not respond to the 459E (the amount owed) within 21 days then the debtor may not dispute the notice and the creditor can proceed to the final step of issuing the winding-up notice to the company. A company may dispute the notice within this 21-day period and in certain circumstance, the wind-up notice may be revoked.
It is important to note that receiving a wind-up notice does not mean you must cease trading immediately. You may have to continue trading to pay off the debt but it is also important to understand that insolvent trading laws state that directors may be held personally liable for any new debts a company incurs if they allow a company to continue trading whilst insolvent.
There are a few options available for businesses that receive a winding-up notice from the Australian Tax Office (ATO) or from another creditor; do nothing and the company will cease on the date specified on the notice, or pay the debt amount in full. Another option is to enter into a payment arrangement with the creditor/s and potentially negotiating to have the wind-up process dismissed.
Help for a Distraught Director and Accountant
Australian Debt Solvers were extremely competent and spent a great deal of time answering our questions. Everything was set out clearly and in a helpful manner with easy to understand instructions. Advice was given with the greatest consideration. I would strongly recommend them to anyone who needs help with company liquidation.
They answered every question we asked within a very short space of time. Nothing was too much trouble and they were very understanding – knowing how hard it is for a business to come to this decision.
I have told other Accountants about the great service they provide.
Keeping a profitable business, after the Court had appointed a Liquidator
We spoke to ADS after our company had already been wound up by the courts. We wanted the assets from the liquidated business, but didn’t know how to get them. We called Debt Solvers and they took care of everything….they got an “Authority to Act” from us, spoke to Deloittes who were the Liquidator, negotiated the sale of the assets, set up a new company for us…….and we are now going from strength to strength. Money was well spent with ADS!
Gary & Jo, UFIF Engineering
Turning around a company that owed too much to the Tax Office
Our company is a Medical recruitment agency with mostly Government based clients. We had a good sales forecast……but were heavily weighed down with debt, mostly from the ATO. I met with Debt Solvers….when I thought I was going to lose the business. They talked me through Voluntary Administration where you offer creditors a reduced amount, and you pay the reduced debt over 12 months – which is called a Deed of Company Arrangement. Our creditors agreed on the offer, and we have gone from strength to strength. ADS even organised a Debtor Finance company to assist with our cashflow at a reasonable rate. Considering I thought we were going to lose the business – an great result!
Shaun, Beat Medical
We’ve helped thousands of Australian Business Directors with the Lowest Price Liquidations in Australia!
Australian Debt Solvers takes up to 10 enquiries per day from Australian Companies that have debt issues. A lot of these have under $100,000 of unsecured debt, with no company assets, and simply need to close the company down. Debt Solvers does this for a fair price, efficiently and with empathy for the Director. It’s a service that has proven extremely useful for Directors, right across Australia.
A low cost Voluntary Administration service to get companies back on their feet
Australian Debt Solvers hears from a lot of Directors, where there company could be profitable and trading well, but they are being tied down by too much debt – of which the majority is usually the ATO. We have worked through with hundreds of companies – a Voluntary Administration – where we negotiate and reduced amount of debt to creditors over usually a 12-24 month period. This is called a Deed of Company Arrangement….and is an extremely effective method of assisting companies to “get back on their feet”. Debt Solvers charges a fair price through this process…….and it’s great to see a business go from strength to strength after this service.
Blows competition out of the water
Firstly Dave showed compassion when the other liquidator was very impersonal. Secondly Australian Debt Solvers are helpful – there was stuff Dave didn’t have to tell me as he is just dealing with our company not our personal affairs. However he answered all my questions which makes it easier and gives me a lot more confidence that we are not breaching rules as we wind down. Thirdly, the fee is so much cheaper than a traditional insolvency practice. So far I am very impressed with Australian Debt Solvers. I will post another review once we have completed the process.
Wind Up Notice FAQs
What is a wind-up notice?
A wind-up notice is a statutory demand that a creditor or the Australian Tax Office (ATO) serves to a company in order to force it to pay its debts. A winding-up notice is usually made under the 459E section of the Corporation Act and is one of the most serious legal notices a limited company can receive and action should be taken immediately to avoid more serious consequences.
After this demand is received the company will have 21 days to dispute the notice, if it doesn’t then the business will not be able to dispute the wind-up order at a later hearing.
A company receives a wind-up notice when creditors believe the debtor is not taking appropriate steps to repay the debt and issuing a winding-up notice tells the company they are extremely serious about getting paid.
Has your company been issued with a wind-up notice? Call Australian Debt Solvers now on 1300 789 499 for assistance and deal with your situation as quickly and efficiently as possible to avoid further legal ramifications later down the track.
What are the different types of winding up a company?
The process of winding up a company can happen in a variety of ways. One of these ways is through a Creditors Voluntary Liquidation (CVL). A CVL is one the most common insolvency process and once it is initiated the winding-up procedure can begin without any court intervention.
A CVL brings the company’s affairs to an end in an orderly fashion and has the purpose of distributing company assets to its creditors.
In general, liquidation of any kind is a winding-up process and ultimately brings the company’s affairs to an end with the purpose of attempting to pay back creditors. However, if your business is facing financial trouble, terminating the company may not be the correct decision. The option of voluntary administration may rescue your business and professional advice from financial experts, such Australian Debt Solvers, is highly recommended.
What is the wind-up procedure?
Although it is best practice for a creditor to receive judgement before issuing a wind-up notice, they are not required to. However without a judgement the debtor can dispute the notice.
If the debtor does not respond to the 459E (the amount owed) within 21-28 days then the debtor may not dispute the notice and the creditor can proceed to the final step of issuing the winding-up notice to the company. A company may dispute the notice within this 21-28-day period and in certain circumstances, the wind-up notice may be revoked.
It is important to note that receiving a wind-up notice does not mean you must cease trading immediately but it does mean you should deal with the situation as soon as absolutely possible.
What actions can be taken once you receive a wind-up notice?
A winding-up notice is among one of the most serious legal actions a limited company can face and you should act quickly if your company receives one. A company typically has 21-28 days to dispute the notice but if they do not do so in this allocated time frame then they may not dispute the notice at a later hearing.
A winding-up procedure does not mean you have to cease trading but it doesn’t mean you have to act immediately to avoid the situation getting worse.
There are a few options available for businesses that receive a winding-up notice. They can choose to do nothing and the business will cease on the date specified on the notice, or they can choose to pay the debt amount in full (usually the best course of action if it is practical to do so). Another option is to enter into a payment arrangement with the creditor/s and potentially negotiating to have the wind-up process revoked.
It is important to act as soon as possible once a winding-up order has been received. Contact the industry experts at Australian Debt Solvers today on 1300 789 499 for a free consultation and determine your business’s next move.
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