Melbourne electrical company collapses after ATO wind-up order

A Melbourne electrical company has folded into voluntary administration following a wind-up order from the Australian Tax Office.

Dandenong-based Impressive Electrical appointed Gess Rambaldi and Andrew Yeo of Pitcher Partners as administrators of the company on June 18.

The collapse comes after the ATO’s recent spate of wind-up orders saw the tax office issue 556 notices to businesses in May alone.

Impressive Electrical appeared before the Supreme Court of Victoria in April after the Deputy Commissioner of Taxation initiated action to wind up the company.

Rambaldi told SmartCompany this morning since his appointment, the ATO – the company’s major creditor – had adjourned its petition against Impressive Electrical until the finalisation of the voluntary administration.

He says the sole-director company had a 15-year history in electrical contracting, 14 employees and five contracts with apartment buildings and schools at the time of the appointment.

“We are not able to continue those contracts, so unfortunately we had to terminate those employees upon our appointment,” says Rambaldi.

Rambaldi says the wind-up order was undoubtedly a catalyst for his appointment but says there were a number of factors at play in the company’s fate.

“The director has advised us the problems for the business date back to 2012, where there were a number of clients that the director struggled with –businesses that were placed into liquidation themselves,” he says.

“It was a domino effect.”

Rambaldi says he anticipates the director will put forward a deed of company arrangement for the business.

Rambaldi says Pitcher Partners has noticed a recent rise in ‘consents’ from the tax office, where the ATO contacts insolvency practitioners to notify them they will be taking action against insolvents or the financially distressed.

“We have a number of consents at any time, but there is currently a larger number,” he says.

Rambaldi says any business experiencing financial distress with the ATO should reach out to them sooner rather than later with a plan to repay debts.

“Any concessions you’re likely to receive will be more generous if it is given in the context of a well-considered plan, not one born of desperation,” he says.

“The earlier you approach the ATO with a plan, the more likely you are to get a favourable outcome.”