If you serve an international customer market, the question naturally arises; where is the best place to base your crypto or fintech business? Our focus here is on exploring offshore solutions for Australian fintech and crypto startups — looking specifically at the possibility of setting up in the Cayman Islands (Cayman) as a jurisdiction of incorporation.
Are you owed money by a company that is being wound up? Don’t get your hopes up until you have seen the 3 month statutory liquidator’s report. It is this report that will give a clear indication of the likelihood of a return.
The winding-up of a company is a daunting experience for a director. They know that their previous actions are under close scrutiny. But does that scrutiny include their personal assets? In short, yes. But liquidators need to tread carefully. In this article, we look into liquidators using the examination power to inquire into a director’s personal assets.
A business turnaround is about getting a business moving in the right direction. Survival is the hopeful outcome of any turnaround process. Survival is a change in the challenged business for the better. It is the process by which a business in financial crisis is transformed into a viable entity.
An important task for a liquidator, once appointed, is to see whether there are any transactions of the company that are ‘voidable’, and can be clawed back for the purposes of distribution to creditors.
If a liquidator is appointed to an insolvent company, and believes assets have been depleted due to fraud, what can they do? Even if the crime of fraud can be proven, this does not necessarily aid the liquidator in recovering assets. Here we look at the option for liquidators to use the concepts of ‘knowing receipt’ and ‘knowing assistance’ established in the 19th century English case of Barnes v Addy to recover from third parties in cases of fraud. It is a difficult claim to defend because it is vague and open to broad interpretation when a director fails to keep adequate books and records before winding up.
Many businesses supply goods to other businesses on credit. In many cases, this inventory is covered by a so-called ‘Retention of Title’ clause in favour of the supplier. Here we assess the consequences of liquidation on a Retention of Title claim, the impact of the Personal Properties Securities Act 2009 (Cth) and whether a liquidator might ever be permitted to ignore such a claim (the answer, generally speaking, is no – they cannot ignore it).
Directors often fail to pay themselves a salary before winding up. Instead, many small and medium-sized enterprise (SME) directors pay themselves throughout the lifetime of a company by withdrawing cash that is accounted for in a company loan account. In doing so, directors often seek to delay the payment of the income tax (PAYG) that they would have to pay if they drew a salary.
The dynamics of liquidations can quickly turn toxic. Directors initially see the liquidator as a savior from tax debts and creditor actions and then when the investigations begin the directors see the liquidator as their enemy.
In this article we explain when a transaction might be voidable under that section, how these transactions differ from another type of voidable transaction, uncommercial transactions, and how liquidators pursue claims under this section.
Liquidators have a set of powers under the Corporations Act 2001 (Cth) (the Act) known as ‘voidable transactions’ (sometimes also known as ‘avoidance provisions’), which allow the liquidator to ‘claw back’ certain transactions in the case of an insolvent winding-up.
Running a business can be tough and no matter how prepared you are, there will always be hurdles along the path. As such, recognising the type of problem that you’re dealing with is vital in determining what strategy should be implemented to respond to a financial crisis. A helpful starting point is to consider whether the problem is an inside problem or an outside problem.