Place the Company into Liquidation

Where a Director Penalty Notice has been received and is unable to be complied with by either entering an instalment payment arrangment, payment of the outstanding debt in full or the appointment of a Voluntary Administrator, the director(s) must consider appointing a Liquidator in order to avoid the potential of personal liability under the Director Penalty Notice.

It is important to note that to avoid the personal liability, the appointment of the Liquidator must be made within the 14 days allowed by the Director Penalty Notice. Merely meeting with an liquidator or advising the ATO of an intention to make such an appointment is not sufficient to avoid liability.

Director(s) need to understand that while in theory the appointment of a Liquidator can occur almost immediately, there is in practice a requirement to compile certain information to be circulated amongst creditors that may take a number of days to prepare.

In light of this, unless director(s) act immediately once they have received a Director Penalty Notice, they may lose the opportunity of appointing a liquidator and be forced to consider the more expensive appointment of a Voluntary Administrator.

Learn more about the process and benefits of Liquidation.