In this process of liquidation, deciding to go bankrupt, is always of significant importance to know how long the process will take from the owners of the company. The duration of the liquidation process can be very short or long depending on the case and type of liquidation. In this blog, we’ll look at the usual time frame of company liquidation and later see how at Australian Company Liquidations we can assist in making the process faster.
Initial Consultation and Preparation (1-2 Weeks)
Business liquidation refers to the process where businesses stop their operations and transfer their assets to a third party, the business liquidation process is as follows the first step involves meeting a registered liquidator. The last process is about analyzing the financial position of a business to decide the more appropriate option to take in this case liquidation. If the company is to be put into bankruptcy and realized, the liquidation process will involve the writing of documents by the liquidator in consultation with the directors. This phase usually takes between one to two weeks in which the liquidator obtains relevant financial data, communicates to the creditors, and gets the process of liquidation started.
Asset Valuation and Sale (2-6 Months)
When the business is formally put under liquidation all the assets are vested in the liquidator. The next step is to measure and recognize such assets, while the subsequent phase entails disposing of property, equipment, and inventories. The completion of this phase may take from two to six months depending on the volume and type of assets. If the assets identified are quite simple and can be easily sold, this part of the evaluation can be done rather quickly. However, it might take a longer period if the business has specific or, in some way, illiquid assets on its balance sheet.
Distribution of Funds to Creditors (4-12 Months)
Once the company’s assets are sold then the liquidator will disburse the remaining cash to creditors. This phase may last as long as four to twelve months. The liquidator is legally bound by a certain hierarchy of payments to creditors and usually is to pay secured creditors initially and then unsecured ones. The duration applicable to this step varies depending on the issues concerning compensation and the structure of credits, creditor disagreements, and the financial situation of the business. Australian Company Liquidations makes this process easier by working fast to ensure that all legal formalities that are in place are observed and all the time that is taken is justified.
Final Closure (Up to 18 Months)
The last process of business liquidation takes place when all company property is sold, all creditors are paid, and all legal or financial processes are over. In the simplest form, it only takes about 6-12 months to have the liquidation process done. Nevertheless, more complicated issues can take from 12 – 18 months or even more of treatment. At this point, the liquidator prepares the reports and then legally shuts the business. Australian Company Liquidations does the best it can to avoid any extra time to be consumed, thus business owners can proceed with their decision to go bankrupt as soon as possible.
To sum up, business liquidation may take different time and its duration depends on several factors, one of them is the type of liquidation, and the other factor is the fact of how entangled is the business’s financial condition. Liquidation Specialists Australia is a place that provides an easy approach to managing your business and helps it go bankrupt and get through the stage of liquidation faster than you can be trapped in this stage for ages, so the owners of the business should think about what they want to do next.