Corporate Insolvency
Corporate winding-up
When an individual’s debts grow to such an extent that they cannot ever hope to pay them, that person must go into bankruptcy. When a company cannot pay its debts it can be put into corporate bankruptcy. The main difference between the two is that the person lives to fight another day when they come out of bankruptcy, while that luxury may not be afforded to a company which may be wound-up - effectively terminated. Corporate bankruptcy can involve two separate processes: administration and liquidation.
Statutory demands against companies
If you are owed more than $2,000 by a company and you are concerned the company cannot pay the debt, you can serve on that company a ‘statutory demand’ which gives the company 21 days to pay.
Voluntary liquidations and uncontested company winding-up
A company can be wound up on its own application (a voluntary liquidation) or on the application of a third party.