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Does company liquidation cause the director to have to become bankrupt?

FAQs | Company Liquidation and Bankruptcy

When a company is in liquidation the company’s assets will be sold and the proceeds used to pay the company’s debts. If the asset sales do not raise enough funds to clear all of the company’s debts it is possible that the company director/s may have liabilities flow through to them from the company. The director’s liabilities are limited to any insolvent trading claim by the liquidator, the extent of any personal guarantees that they have given, and some ATO debts incurred by the company. If the directors are unable to pay those debts, then they may need to seek the protection of bankruptcy.

For further information on bankruptcy, we recommend our articles ‘Pathways to Bankruptcy – Essential Facts’, ‘Life During Bankruptcy’ and ‘The Bankruptcy Option Explained’.

Nicholls & Co have a complementary ‘help desk’ to answer your questions on bankruptcy. Call Nicholls & Co on 1300 060 122 or email helpdesk@nichollsco.com.au.

Alan Nicholls - Registered Trustee

Alan Nicholls’ no obligation help desk

Nicholls & Co provide a free, no obligation ‘help desk’ for people considering bankruptcy – we discuss and explain bankruptcy and answer questions for anyone who is considering bankruptcy. The Nicholls & Co help desk can be accessed by phone  
1300 060 122  or helpdesk@nichollsco.com.au . Alan Nicholls, Registered Trustee in Bankruptcy is also available to answer your questions to enable you to decide if bankruptcy is right for you.