LATEST INSIGHTS
Loans for Employee Entitlements and the Effect of Subrogation
When a company is experiencing cash flow difficulties, directors will often loan money to the company to enable it
Implications of Failing to Lodge a Statement of Affairs
When a person is made bankrupt by way of a Sequestration Order, Section 54(1) of the Bankruptcy Act 1966
SIGN UP TO OUR MONTHLY NEWSLETTERS
Engage with us early if you see rough waters ahead
The ‘Safe Harbour’ provisions were enacted in September 2017 and provide directors with an exception from a personal insolvent trading liability where they are developing courses of action which are reasonably likely to lead to a better outcome for the company than the immediate appointment of an external administrator.
The new provisions are designed to foster a more entrepreneurial approach from directors in an effort to overcome the Corporations Act insolvent trading provisions.
In determining whether a course of action is reasonably likely to achieve a better outcome, the provisions make reference to:
- A director being properly informed of the company’s financial position
- A director taking appropriate steps to prevent any misconduct by officers or employees of the company that could adversely affect the company’s ability to pay all of its debts
- Maintenance of appropriate financial records appropriate to the size and nature of the company
- Receipt of advice from an appropriately qualified entity (for example, an insolvency practitioner) who was given sufficient information to give appropriate advice
- Development or implementation of a plan for restructuring the company to improve its financial position
Certain matters must be done in order to rely in the Safe Harbour provisions, including:
- Payment of all employee entitlements as and when they fall due
- Compliance with all lodgment obligations required by taxation laws
At HLB Mann Judd Insolvency WA, we are equipped to take on a Safe Harbour engagement for you or your client.
If you require further information regarding Safe Harbour, please make contact with us on 08 9215 7900
