Solvency is an unfortunate reality after filing bankruptcy, and it puts even your most valuable assets at risk. There are many ways to secure some level of protection around your assets through behaviors such as consistently paying your ATO on time. There are tools that can be found online such as ATO’s Simple Tax Calculator that help you estimate the payment amount that you will need to make in order to protect your assets from vulnerability.
- People often think that there is something like business bankruptcy that is distinct from personal bankruptcy. This is far from the case.
- The Corporations Act comes into play when businesses fail to be solvent while the Bankruptcy act kicks in when sole traders and trusts go bankrupt.
- When one is a small business owner and personal affairs tend to mingle with business affairs, one needs to differentiate the two.
“However your business is structured, I tend to find that when you’re a small-business owner, personal and business finances are often intertwined.”