• Am I personally liable for my company’s debts?

    Companies are separate from individuals, so you as a director generally won’t be held liable for your company’s debts – although there are exceptions.

    If you are found to have traded while insolvent, you may have to compensate creditors for any losses accrued during that insolvent trading period.

    If you are found to have breached your director’s duties, you may have to compensate creditors for any losses accrued as a result of your actions.

    If you are found to have engaged in phoenix activity, you may have to compensate creditors for any losses accrued as a result of your actions.

    If you provided a personal guarantee to cover the company’s liabilities, you may have to repay those debts if the company can’t.

    If your company does not meet its pay-as-you-go (PAYG) withholding tax obligations and superannuation guarantee obligations, you may have to compensate the Australian Taxation Office (ATO) for the shortfall (see Director Penalty Notice for further explanation).

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