Consequences of liquidating a

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But to get that information they have to specifically tick the relevant box, and pay for it.So that “mark” on a credit record is there, but it is unlikely to be noticed if you are applying for credit in a personal capacity.To avoid any of the above consequences Directors may like to look at other options such as Company Voluntary Arrangements (CVA) or pre-pack phoenix process to retain control.In any event, it is vital that businesses take qualified and experienced insolvency advice before choosing a course of action to ensure that the safest route is taken.Putting a business into an insolvency procedure is not a risk-free enterprise and it is important that Directors understand some of the issues that could possibly arise as a result.All cases are different, so depending on the individual case, some of these may apply: Personal claims – if directors have given personal guarantees then they could be liable to pay debts attached to these themselves in the case of insolvency.

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That’s a lot of insolvencies, a lot of worried directors and, as it turns out, a lot of breaches of the Corporations Act.Insolvency and the instigation of a formal insolvency procedure will almost certainly be considered an event of default under these rules and will entitle the lender to take steps to enforce any security it holds.This could mean taking possession of any assets or even the entire company is need be.One of the main concerns of a director whose company is experiencing financial difficulties is to understand the potential consequences if their company enters liquidation.Well, if it is any comfort for those worried directors, they’ll probably find the consequences are usually not as bad as they fear. You are not alone Firstly, being a director of a company that enters liquidation is a very common thing.

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