While running a business, we often experience troubles with cash flow management. Observations reveal that credits play a major role in running all small and big business houses. Whenever a company or business gets some credit, it follows some written, verbal or contractual arrangement. However, all credit transactions generally involve some risks regarding possible repayments of financial obligations to a company. In such cases, the debtor may be declared a defaulter and it may cause harm to the reputation of the company. In order to deal with such situations, businesses follow company liquidation advice. Pursuant to section 161(1) of the IRDA, where the directors of a company have made and lodge with the OR a statutory declaration in the prescribed form, the directors must immediately appoint a licensed insolvency practitioner to provide provisional liquidation Singapore.
What do you need to know about company liquidation?
In simple terms, the liquidation process deals with the realization of the assets of the company via some public auction or private treaty so that pending debts can be paid off. In general, liquidation occurs when the company becomes insolvent or it is not able to pay off pending debts anymore. In all such scenarios, the assets of the company are sold either voluntarily or involuntarily and the generated money is used to pay pending amounts to the shareholders and creditors. When company liquidation procedures come into action, the trading activities are stopped at the business terminal. Moreover, they cannot work on any property rental or employment-related procedures. Adequate implementation of liquidation procedures can save the company from bankruptcy. Below are a few common reasons to go ahead with company liquidation advice:
- Cessation of various activities at business.
- Management of shareholders disputes and deadlock.
- To handle financial and corporate restructuring purposes.
- To minimize or maximize tax advantages for business.
- To deal with any breach of statutory protocols.
- Loss-making operations.
- Inability to pay off pending debts.
Why need professional company liquidation advice?
While working on company liquidation procedures, it is important to examine various factors and operations to ensure adequate results. In order to handle all steps carefully, it is necessary to take help from experts that provide provisional liquidation Singapore services. The professional liquidators can handle all assets of the company while considering the pendency of claimants and creditors on priority. There are generally two types of liquidation or winding up procedures followed by companies in Singapore. When you choose voluntary winding up, it involves directors and members of the company to take relevant decisions. They file a declaration for solvency and appoint a liquidator to handle all relevant procedures for liquidation. On the other side, the creditor’s voluntary winding up procedures requires creditors to choose a liquidator to handle all decisions and processes. Another option is a compulsory winding up procedure where all decisions are made by the court under the insolvency, restructuring & dissolution act. The court may also hire a liquidator to handle the entire procedure and all the involved parties get paid off with the sale of assets. If you are experiencing any trouble related to the financial management of your company or the debts are increasing beyond the set limits, it is good to avail yourself of guidance for provisional liquidation Singapore. The professionals may guide you better on possible procedures and strategies to achieve positive outcomes.