What qualifies for safe harbour protections?
The insolvent trading law, as seen from the eyes of the Australian business community, was verging on draconian, penalising business failure heavily and stigmatising corporate insolvency beyond salvage. If, despite the best of plans, a business was heading for failure, the director had all the incentives to act conservatively rather than take bold decisions to lead the […]
Voluntary Administration for Creditors
Voluntary administration is executed over a series of steps, beginning with the decision to enter into voluntary administration, proceeding with the appointment of an administrator who investigates the status of the organisation, and culminating in creditors meeting to decide future courses of action. Let’s consider these processes in detail. Why is voluntary administration necessary? The […]
Voluntary Administration for Directors
As a director, you have legal duties and obligations to fulfill throughout the stages of your company’s life cycle. Going through voluntary administration can be difficult for company directors as it accentuates a range of legal implications. You’ll want to be aware and prepared for these, so you can continue to fulfill your obligations and […]
Safe Harbour for Directors
It’s not unusual for company directors to fall into the trap of insolvent trading in an attempt to save their company from liquidation. And while this practice is illegal, in recent years new legislation has been introduced to protect company directors who are trying to turn their business around. This legislation is called ‘Safe Harbour’. […]
A guide to business restructure
After restructuring, your business should become more profitable, organised and strategic – but only if you do it right. Changing any element of your business, such as legal aspects, ownership or operational structure, is referred to as restructuring. It’s a complex process to plan and implement, because it typically involves drastic changes that need to […]
How Safe Harbour Will Impact ‘Ipso Facto’ Clauses
Changes are being made to Australian laws that will impact what occurs when businesses are experiencing financial trouble. But what are the changes, and how are they different to the current legislation? Find out how Safe Harbour will potentially change current business processes. History Until recently, Australian insolvency laws have made it difficult for businesses […]
Informal Restructuring
How can an Informal Restructuring help a company in financial difficulty? An informal restructuring is usually the “least drastic” solution available to a company in financial distress. They are very flexible, and are achieved behind-the-scenes. They can be achieved in a short space of time or can take years to complete. Many restructurings can be […]
Dealing with personal guarantees
What is a personal guarantee? A personal guarantee is an agreement by one party to be liable for the debts of another. Usually, personal guarantees will be given by the directors or shareholders of a company to personally guarantee the payment or obligations on behalf of their company. A major problem that you can face […]
Overview of Safe Harbour Provisions
What is safe harbour? Safe harbour is legal provisions that reduce or eliminate liability in certain situations as long as certain conditions are met. Under these provisions, a client won’t be liable to some administrative penalties if they are able to provide all the relevant tax information to you. This will also only apply if […]
Administration v Liquidation
Both administration and liquidation are formal insolvency procedures, however they are significantly different. Administration is entered into with an aim of rescuing the business and recovering it so that the company can avoid insolvency. Liquidation is the process used to realise a company’s assets prior to it closing. Administration A company in will enter into […]