With COVID-19 causing major disruptions to businesses and impacting the economy as a whole, businesses are faced with many unforeseen challenges. At times of financial distress you may be finding it tough navigating through difficult financial situations.
You may be worried about your duties as a director or business owner. According to the Corporations Act 2001 directors have the duty to prevent the company from incurring further debts once the company is insolvent, and if you fail to do so you will be become personally liable for the debts incurred.
Some good news is that Australia’s ‘Safe Harbour’ laws are designed to protect directors that attempt to do the right thing and lawfully turn around their company, even if the plan fails and the company later go into liquidation. If you would like more information on ‘Safe Harbor’ laws please click here.
On 25th March 2020 the Coronavirus Economic Response Package Omnibus Bill 2020 came into effect, granting temporary relief for financially distressed businesses. This included providing an additional ‘Safe Harbour’ for businesses for the next six months. This means that you will not be liable for any insolvent trading from the period 25 March 2020 to 25 September 2020.
If you would like to learn more about the ‘Safe Harbour’ provisions and changes to legislation that may impact your business please contact us. We understand that everyone is going through tough times and we are committed to helping businesses overcome challenges concerning insolvency and financial instability. We are registered company liquidators who offer a FREE 24/7 insolvency hotline for Australian directors seeking free, confidential advice. Please call us on 1800 731 155 now.