Paying creditors pre-liquidation

What’s a preference and what will a liquidator do? A difficult area of the Corporations Act is in regard to Unfair Preferences. The general philosophy of the law is that where possible, creditors should be treated evenly or “pari passu”. So as a general principle the...

Sale of assets at undervalue

Personal liability for the shortfall There is nothing to stop a director of a struggling company selling company assets. We have a page called Selling Assets of an Insolvent Company which gives some guiding principles. But here we want to look at the potential for...

Director liability for company tax debts

Is it automatic? A common question we are asked is whether a director is automatically personally liable for a company’s tax debts. It’s a little bit complicated but the answer is – no! However, it is possible to become personally liable for a company’s tax debts. And...

Director Liability for loans and drawings

What to do if the accounts show directors loans or drawings owing to the company Often a company’s financial accounts will show “directors loans”. That is an amount owing by a director to the company. So it is an asset of the company that is recoverable by a company...

Insolvent Trading

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