When a company runs into financial difficulty, the owners can engage an insolvency expert such as Principle Insolvency who can assist with negotiating new terms with its bankers, creditors and/ or customers. Often, the directors/shareholders sink more funds into a business with the hope of saving it but only result in incurring greater losses. If you seek help early, you may have a choice of options rather than have unpleasant outcomes forced upon you. On this page you will find the options available to us if we are working on your business worries.
Receivership
If your company is unable to pay its debts to a secured creditor, it may be forced into receivership, where a receiver is appointed by a secured creditor to deal with the secured assets. A company can be in receivership and also in liquidation or voluntary administration.
Voluntary Administration
If your business is failing, you may be able to save it by choosing to bring in an administrator — this is called voluntary administration. An administrator is appointed to review and rearrange a business to avoid liquidation. Call us to learn if this is the best option for you.
Liquidation
If a company can’t pay its debts, it may be put into liquidation, meaning all its unsecured assets are sold to repay creditors. A liquidator is appointed to investigate and deal with all the business assets. The creditors can apply to the High Court for this to happen (creditor liquidation), or the shareholders can pass a special resolution (voluntary liquidation). The liquidator must be a licensed insolvency practitioner. Click here to view our registration with the New Zealand Companies Office.
Voluntary Liquidation
This option should be used for the “end of life” of a business that is no longer operating. Don’t think that just because your business has been struck off, or you have ceased trading and stopped filing returns, that you won’t be sued in the future. For a small fee, a company can be reinstated to the companies office register and directors sued. Ensure this doesn’t happen by liquidating the company, which means the company can never be reinstated.