A Childcare centre in Sydney was placed into liquidation by the ATO due to non-compliance demands and non-payment of income tax.
A childcare case study
We were appointed as the liquidators and worked with the Directors and legal advisors to ensure that the business could continue trading during the liquidation process. Due care was taken during the process to ensure that there were no interruptions to the trade of business and no disruptions to the quality of care provided to the children attending the Childcare centre.
Our review of their operations identified various procedural and operational flaws including identification of the fact that the Childcare fees used by the centre were below market rate. We suggested various aspects of the business for the Directors to address and also provided advice in relation to the general financial position including their ability to obtain further external finance.
The continuation of trade allowed Directors to obtain funding, guaranteed full payment of all creditors and provided them with the opportunity to make the application to terminate the wind-up orders of the court. One of our key roles was to prepare a detailed report as to solvency for the Court's benefit in determining whether to terminate the winding up. The control of the company was returned to the Directors.