Directors had “safe harbour” until the 31st of December to consider the following 3 questions when it came to their business:
1. Is this a viable business and is there danger of insolvency?
2. Is the business insolvent but there’s a chance we are still feasible? or
3. Is the business insolvent and there is no viable option to save the business.
The goal of the legislation was to take the pressure of Directors during these unforeseen times.
However… the time is now up!!
As a business who is now owed debt from one of these potentially insolvent or soon to be bankrupt or liquidated companies, you have to act fast.
First, some definitions to be aware of:
Liquidation – the process of bringing a business to an end and distributing its assets to claimants. It is an event that usually occurs when a company is insolvent, meaning it cannot pay its obligations when they are due.
Insolvency is the state of being unable to pay debts, by a person or company, at maturity; those in a state of insolvency are said to be insolvent. There are two forms: cash-flow insolvency and balance-sheet insolvency.
Bankruptcy is a legal process through which people or other entities who cannot repay debts to creditors may seek relief from some or all of their debts. In most jurisdictions, bankruptcy is imposed by a court order, often initiated by the debtor.
- Write a list and contact details of the companies who owe you money
- Pick up the phone and call 07 3438 1200 or email [email protected]
- We’ll take it from there.