Knowledge Hub
Liquidation in Australia
Understand the liquidation process, your obligations as a director, and the options available to your business. Our comprehensive guides help you navigate financial distress with clarity and confidence.
What you will learn on this page
01
Understanding Your Situation
02
Your Obligations as a Director
03
Liquidation vs Other Options
04
What Happens During Liquidation
01
Understanding Your Situation
Understand what liquidation involves and whether your company is showing signs of insolvency.
Search ASIC and published notices to confirm a company's status.
02
Your Obligations as a Director
What the law requires of you as a director once your company is in financial trouble.
Your role, your obligations, and what the liquidator will ask of you.
03
Liquidation vs Other Options
How liquidation compares to the other formal insolvency processes, so you can see where it sits.
Bankruptcy applies to people; liquidation applies to companies.
04
What Happens During Liquidation
What actually happens once a liquidator is appointed, from creditors through to employee entitlements.
Where staff sit in the queue and how FEG covers unpaid entitlements.
Payments made before liquidation that a liquidator can claw back.
Is There an Alternative?
Protection from insolvent trading liability while you pursue a better outcome.
Are you concerned about your financial position? Contact us now for an obligation free consultation.
FAQ
Short answers to the questions directors ask us most often.
If yours is not covered here, call us on 1800 246 801.
A statutory demand is a formal request for payment of a debt over the threshold. Ignoring one for 21 days creates a presumption of insolvency, which a creditor can use to apply to wind the company up.
A garnishee order lets a creditor recover a debt directly from a third party who owes you money, most commonly your bank or your customers. The ATO can issue one without going to court.
Do not ignore it. The options available narrow sharply once judgment is entered, so getting advice early usually gives you more room to negotiate or restructure.
Usually earlier than directors expect. Appointing while there are still assets to realise gives creditors a better outcome and reduces the risk of insolvent trading claims against you.
Phoenixing is winding up a company to avoid paying its debts, then continuing the same business through a new entity. It carries serious penalties for directors and advisers involved.
Yes. ASIC can disqualify a director who has been involved in multiple failed companies, and a court can do so for breaches of duty. Disqualification periods can run for several years
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