Business & Company: Insolvency & Liquidation - Guides
Insolvency & Liquidation
2. How a Lawyer Can Help
Firm / Chambers:
Last updated: 11 Aug 2015
- A lawyer can help you to understand the insolvency process and your rights and obligations in an insolvency situation. This applies whether you are a:
- director;
- creditor;
- employee; or
- shareholder.
- If you are a director or shadow director of a company in financial difficulty a lawyer can help you to understand your duties such as:
- your responsibility to understand and monitor your company’s financial position at all times; and
- your obligation to ensure that your company does not trade while insolvent.
- A lawyer can also explain your director’s duties in an insolvency situation including your duty to provide the administrator with:
- information and written reports regarding the company’s affairs including its:
- financial situation;
- business; and
- property;
- company books and records; and
- reasonable assistance.
- A lawyer can also advise you of the effect a liquidator’s appointment has regarding:
- your powers as a director;
- any civil penalties or criminal charges you may face for breaches of duty; and
- the effect the company’s insolvency may have on you personally.
- If you are a creditor of a company in liquidation a lawyer can advise you of your rights including your right to lodge a proof of debt and receive a dividend.
- If you are an employee or former employee of a company in liquidation a lawyer can advise you of your:
- rights to wages and other employee entitlements; and
- eligibility for Fair Entitlements Guarantee (FEG) assistance.
- If you are a shareholder of a company in liquidation a lawyer can advise you of:
- your likelihood of receiving a dividend;
- the possible tax implications of any capital losses realised; and
- your rights to information regarding the progress and outcome of the administration.
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