Safe Harbour aims to encourage directors to take reasonable risks to save a company from financial distress without exposing themselves to personal liability for insolvent trading.
The statutory provision provides relief from potential personal liability for directors in situations where the company is experiencing financial difficulties and the directors meet strict criteria.
Amongst other things, directors must show that they have taken reasonable steps to develop and implement a restructuring plan that is likely to lead to a better outcome for the company than an immediate liquidation, whilst ensuring that employee payment, tax lodgement and other compliance obligations are met.
However, directors who believe they are covered by Safe …
Read the full article at: https://www.businessnews.com.au/article/Does-Safe-Harbour-provide-effective-protection-from-insolvent-trading