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10 Things to Do Before the Storm Comes

5 min read

None of these are unusual to find in a business. What matters is knowing about them before a creditor does.

1. Check your balance sheets, especially loan accounts. Is there any director's loan owed to the company? Any personal loans owed to the company? Any inter-company loans owed to the company?
2. Check your PPSR's. Do you have PPSR registration over all the assets within the business?
3. Check the scope of your PPSR's. Do you have “all monies and future acquired assets” cover? This is similar to the old fixed and floating charges — security over current and present assets, plus any debtors.
4. Check your licence agreements. Make sure you have licences over intellectual property, phones, email addresses, and your website. Do your licence agreements allow you to reassign the licence to another corporate identity, and to recover any outstanding licence fees as an unsecured creditor?
5. What's your credit card balance?
6. Have you received any creditor statutory demands or director penalty notices?
7. What's the position of your employees' entitlements and superannuation? Otherwise these can become priority creditors in a liquidation or administration.
8. Have you paid your house payments out of the business rather than through drawings from the company?
9. Have you taken dividends out of the company?
10. Have you paid any preference creditors in the last six months? A preference creditor is someone who has received funds from you through the company shortly before a period of financial distress — and those payments can potentially be clawed back.

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