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A significant contributor to inefficient business practices includes maintaining redundant entities. Redundant entities risk over-complicating group structures, eroding group profits through unnecessary compliance cost and management time each year.
If this is the case for your business, Grant Thornton’s corporate simplification program may be able to help you streamline your business and achieve other benefits. We carefully review your corporate structure to identify those entities that can be removed and can create savings, improved corporate governance and transparency and reduce directors' exposure.
We assist organisations that need to reduce operating costs and achieve a more simplified and transparent corporate structure by eliminating entities that no longer serve a useful purpose.
We apply a risk-based evaluation of our clients’ business operations, identifying and addressing areas where transparency and efficiency could be improved and unnecessary costs avoided.
We help with the entire process, including:
In your business simplification process, if you need to eliminate an entity there are two common methods to consider: Members Voluntary Liquidation and deregistration. Tax and past history of the company are key drivers of the choice between them.
In many cases, directors identify that the 'risk' benefits of a business undertaking an MVL clearly outweigh the small 'cost' benefit of a deregistration.
An MVL provides greater certainty and comfort to Directors.
Once a liquidator has been appointed, the process typically takes between 5-9 months to lodgement of final documents. ASIC then automatically deregisters the company three months after final documents are lodged.
For ASIC to accept an application for voluntary deregistration, the company needs to fulfil these requirements:
A deregistration may be effective where the company is dormant, has ceased trading, has no liabilities and assets less than $1,000. It must be able to meet the criteria for deregistration.
Deregistration is a shorter process and the cost to deregister is cheaper. It does not provide the same level of comfort to directors regarding advertising for creditors and the clearances obtained from relevant Australian tax bodies in an MVL.
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In the meantime, if you have any questions, please don't hesitate to contact us via communications@au.gt.com.
An MVL is a solvent liquidation. Directors make a declaration that the company will be able to pay its debts in full within 12 months of the commencement of the winding up.
The Liquidator seeks clearances from both state revenue and federal Taxation Authorities, advertises the liquidation, and calls for any creditors to lodge details of their claim prior to distributing the remaining assets of the company.
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