These rules, which absolved directors from personal liability if their businesses traded while insolvent, have been replaced by legislation that includes a new, streamlined SME restructuring process that came into force on 1 January.
As of that date, a company with debts due and payable, that they cannot pay, is technically insolvent and its directors are at risk for debts incurred by the company.
There are a number of upsides and potential pitfalls within the new insolvency model that small business owners must be aware of, so that if they undertake restructuring in 2021, they are fully aware of the consequences.
Did you know?
- There is the potential for a spike in Australian businesses experiencing difficulties and requiring turnaro…
Read the full article at: https://www.mybusiness.com.au/legal/7907-what-sme-directors-need-to-know-about-new-insolvency-rules