Companies that are facing financial difficulties may need an insolvency lawyer. It is best to contact an insolvency lawyer when you become aware that your company may not be able to service its debts as they fall due. You can also contact an insolvency lawyer once your company has become insolvent.
While colloquially the terms are often used interchangeably, bankruptcy applies to individuals, whereas insolvency applies to companies. However, both terms have the same outcome: the person or company cannot service their debts.
If your business has just started experiencing financial difficulty, an insolvency lawyer can help you formulate a plan to get your business back on track. This includes re-negotiating with creditors, or entering debt agreements. Alternatively, an insolvency lawyer can also help guide you into insolvency. It is always a good idea to be proactive in these situations, and an insolvency lawyer can help place your company in a more comfortable position.
If your business is already insolvent, an insolvency lawyer can guide you through liquidation, voluntary administration, or receivership processes. An insolvency lawyer can also provide you with information about special any small business procedures or concessions that may apply to your company.
Directors of a company can face hefty civil and criminal penalties for permitting a company to trade while insolvent. An insolvency lawyer will be well-versed in the Corporations Act and the directors’ duties contemplated therein. Butlers Business Lawyers knows the importance of protecting directors from personal liability during periods of financial instability or insolvency in the company.