Business entities in the United States, have no private limited company available in Malaysia.

Business entities in USA
- Sole Proprietorship
- Partnership
- Limites Liability Company
- Business corporation

Fiona was a young woman just starting out in life. She had a wonderful job which she loved and a happy partnership. Unfortunately, Fiona had fallen prey to the trappings of credit cards which left her extremely stressed and scared. Because she had a stable income, offerings by financial institutions to take up a new credit cards seemed like a good idea at the time – until they mounted up. Thinking it would be helpful, she took advantage of transferring debts from one card to a new interest free card with the intention of cutting up the old card  but that plan backfired. Soon the debts became so high she was taking cash advances to repay minimum repayments on other cards. It was a downward spiral. Fiona did not commit any crimes. She simply got caught up in a credit card life sentence! Fiona owned a car but had no other assets.

 

SITUATION

Jamie and his Mum Anita were joint directors of a company. Within that company they owned and operated a Cafe/Restaurant with Jamie taking charge of the kitchen and Anita running the restaurant. Although they had a good following and lots of positive feed back from customers, with the current economic climate, the figures took a steady decline. As with many businesses, putting aside for debts are often the last thing they can manage to do. They both rallied and tried to do whatever they could to keep everything going, putting in long hours, streamlining menus etc with the aim of making the business more profitable and catching up on the debts. They even re-branded the cafe/restaurant and re-vamped the decor which turned out to be a winner with the public and business began to recover slightly. Sadly, it was too late to catch up despite their best efforts and positive feedback on the food and new vibe. They had become too far behind on their  debts and lease obligations.

 

Running a business during bankruptcy

Adrian is a 36-year-old tradie from Queensland. He runs his own odd-jobs business, called Adrian’s Assistance. Adrian earns $40,000 a year.

Adrian and his wife rent their apartment in Logan City. Adrian owns a van worth $6,000 which he uses for work. He also owns work tools which are worth around $3,000.

Being self-employed, with a young family at home, Adrian struggles to find time to keep records for his business. He was surprised to discover he owed $100,000 of business-related debt to the Tax Office (ATO).

Also, being a tradie, Adrian’s income can be inconsistent. He relies on credit cards to pay for essentials, and he owes the bank $20,000.

Adrian spoke to his accountant, who referred him to a registered trustee to discuss bankruptcy.

The registered trustee explained to Adrian some of the ways bankruptcy would affect him:

Adrian would be released from his unsecured debt (ATO* and credit card)

Adrian could keep his van because its value is below the vehicle threshold**

He could also keep his work tools because their value is below the threshold**

Adrian could continue to work as a sole trader. However, he would either need to tell people he is bankrupt, OR change his business name to include his full name

Adrian would not have to make compulsory income payments because he earns under the income threshold***