What Is Insolvent Trading?
Insolvent trading is a term used to describe the act of trading while knowingly insolvent or being unable to pay your debts as they fall due.
If you are considering ceasing trading, it is important to seek legal advice to ensure you are aware of your obligations and the potential consequences of insolvent trading.
Brisbane Debt Solutions can provide you with expert advice on insolvent trading and help you understand the options available to you.
If you are found to be trading while insolvent, you may be subject to legal action from your creditors. This could include bankruptcy or liquidation, which could have a serious impact on your personal finances.
It is important to remember that insolvent trading is a civil offence, and it is in your best interests to seek professional advice before making any decisions about your business. Brisbane Debt Solutions can help you understand the implications of insolvent trading and make the best decision for your business.
The Consequences of Insolvent Trading
Insolvent trading is a serious offence that can have severe consequences for your business and personal finances, including:
- Compensation Proceedings: If creditors lose money as a result of your insolvent trading, they may be able to take legal action against you to recover their losses. The ASIC can also bring proceedings against you for compensation.
- Civil Penalties: If you are found to be liable for insolvent trading, you may be fined up to $200,000. Pecuniary penalties will be charged against the director personally.
- Criminal Charges: As mentioned above, insolvent trading is a civil offence. However, if you are found to have traded recklessly while insolvent, you may be liable for criminal charges. This could result in a jail sentence of up to five years.
Let Brisbane Debt Solutions Help You Avoid Insolvency
If you are considering ceasing trading, it is important to seek professional advice to ensure you are aware of your obligations and the potential consequences of insolvent trading.
Brisbane Debt Solutions can provide you with expert advice on insolvent trading and help you understand the options available to you. We can also assist you in making a plan to exit your business in the most financially advantageous way possible.
Get in touch with us today to find out how we can help you.
Insolvent Trading FAQ’s
What is insolvent trading, and how can Brisbane Debt Solutions assist in this matter?
Insolvent trading occurs when a company continues to incur debts while it is insolvent, or likely to become insolvent. Brisbane Debt Solutions can provide expert advice and assistance to directors who may be at risk of insolvent trading and help them understand their legal obligations and potential liabilities.
What are the consequences of insolvent trading in Brisbane?
Directors who engage in insolvent trading may face legal action and may be held personally liable for the company’s debts. This can include fines, penalties, and potential disqualification from managing companies in the future. Brisbane Debt Solutions can provide advice on managing the consequences of insolvent trading and developing a plan to address the company’s financial issues.
How can Brisbane Debt Solutions help to avoid insolvent trading in Brisbane?
Brisbane Debt Solutions can provide advice and assistance to directors to help them understand their obligations and avoid engaging in insolvent trading. This can include monitoring the company’s financial position and taking prompt action if it appears to be in financial difficulty, seeking professional advice if necessary, and developing a plan to address any financial issues. By taking proactive steps, directors can avoid engaging in insolvent trading and potential legal and financial consequences.