Are you worried about your business and about your personal assets? You are not alone.
Who is at risk in the current economic precariousness?
Global uncertainty arrived with the pandemic in 2020 which caused untold significant financial distress and hardship.
The aftermath of the crisis is still unpredictable. Many businesses are going to feel the backlash. It is normal to be worried about the future of your company and your personal assets.
You are likely to be most impacted if you are in hospitality, retail, fitness or building and construction industries. While it is important to keep in mind that there are many opportunities for turnarounds, it is essential to know what responsibilities and risks small business owners face.
With knowledge of your financial obligations and the specifics of your position as a business owner comes the ability to prepare an appropriate strategy.
What is the most likely liability to personal assets when suffering from business financial hardship?
If you are suffering from financial distress, you will be uncertain about your business’s future. The problem can be insufficient cash flow or even negative cash flow, high interest rates and payments, loss or damage, accumulation of debt or a drop in working capital.
It is normal at that point to question the impact of business liability on your personal assets. You want to know what are the biggest risks to you and how to thwart them.
As experts with decades in the industry, we have observed numerous businesses suffering the same downfall. As you struggle to meet your obligations with no expert outside counsel, it is difficult to prioritise. In the end, the major liability is likely to be your tax debt.
While the Australian Taxation Office has put in place some measures to support business taxpayers wanting to do the right thing, navigating the system without financial experience is arduous.
What are the two things to do when your business is facing financial hardship?
Everyone is in a different industry and situation, with different working conditions and limitations. But overall, there are two focuses on which a small family business director should concentrate on.
- Understand exactly what business liability could impact your personal assets. and
- Simplify the resolution of your tax debt.
There is any number of ways to accomplish those two items. Our business specialises in planning and orchestrating achievable step by step strategies for a better outcome for you.
How can we help you?
We recommend doing a business viability assessment with us. The process is quick and effective to understand where your business is at, and where it can go.
We take care of the uncertainty, educate you and offer you proven solutions. Get an outline of your exact personal liability so you can make informed decisions.
We can further negotiate a better deal with the Australian Tax Office for you. There are many options, and one is sure to be a perfect fit to get your company back on track. A typical payment plan deal consists in paying back your tax debt over a number of years and removing the interest charged.
What concrete actions can you take?
You can consider implementing the new Debt Restructuring Process (DRP). This debt compromise process was introduced by the Federal Government earlier this year.
The process was created to help businesses in your situation. It puts a stop on existing debts and cuts a deal with the creditors involved while you restructure and continue to trade.
Under the conditions of the process, you do not have to fear voluntary administration or liquidation for your business. It is meant to offer a safe solution during the current uncertain times. Small businesses are important to our economy and the government recognises that.
Some conditions need to be fulfilled to be successful in your application. We can make sure your business complies and offer a turnaround plan that pacifies your creditors. The DRP is an evolving process, however it is very effective for the long term viability of your business.
Tax debt, is it time to panic?
Having personal liability and a big tax debt is not a crisis for you. But not planning and having no control over a downward spiralling situation is a crisis. Now is a golden opportunity for you to reshape your business for lone term success. Correctly assessing your situation and strategically planning a viable answer will provide the solution.
Get the assistance you need to assess your prospects and plan accordingly.
We specialise in helping directors of small businesses in financial distress and have your best interests at heart.