As The Director, Am I Going To Lose My Home If I Liquidate The Company?November 4th, 2016
“As The Director, Am I Going To Lose My Home If I Liquidate The Company?”
Well, the short answer is no. Company liquidation is by definition about your company, and not your personal assets. You as the director are protected by company law, and therefore have limited liability of its debts. So for all unsecured company debt, it should not affect your personal assets. However, you do need to be careful of some specific areas. Does the company have a secured loan with a bank, and is that loan therefore secured by some of your personal assets? Have you signed personal guarantees or director’s guarantees for supplies or for a lease? As you’ll be personally liable for these debts. What is the current status with the ATO? Have they issued you a directive penalty notice? Because again there may be some personal liability here.
If you have outstanding pay-as-you-go or PAYG tax or superannuation, you need to get on top of the situation as quickly as possible. Have you incurred more debt with your creditors when you should have known that the company can’t continue to keep trading? You need to fully understand these four major areas before liquidating a business, but you should act quickly. Go to our website for further advice or give us a call and we can talk you through your specific situation.
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