WA Consequences to Declaring Bankruptcy?

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BETSY

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6 March 2019
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I am a director of a company /business that no longer trades anymore. I don't owe any money to creditors except GST to the ATO. What would I have to pay or lose if I declared bankrupt?
 

Rob Legat - SBPL

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16 February 2017
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To be clear, the GST is owed by the company and not you personally? And you’re thinking ‘bankruptcy’ for the company, not yourself personally?
 

Rob Legat - SBPL

Lawyer
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16 February 2017
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Gold Coast, Queensland
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Okay, companies can't declare themselves bankrupt - bankruptcy doesn't apply to companies, only people.

What your company is likely to be is insolvent. There's no problem with this as long as you don't breach the Corporations Act, such as by trading while insolvent. For example, incurring further debts without a reasonable expectation that you will be able to pay them.

Your options are, realistically, find an injection of capital to pay the debt (bearing in mind the above warning that you only do so if you have prospects of trading to pay the loan back), appoint a liquidator to wind the company up (which will cost money the company doesn't currently have - again a 'no no'), or do nothing and allow the company to be eventually wound up by the ATO if the debt is significant enough. That way, the liquidator is appointed by the court and the company doesn't have to pay for it.