Insolvency

What happens if I trade while insolvent?

It is illegal to trade while insolvent. Directors who trade while insolvent may face three different types of action:

  • Civil penalties – this may include pecuniary penalties of up to $200,000
  • Compensation orders – directors may have to compensate creditors for some or all of their losses
  • Criminal charges – this may include imprisonment for up to five years, or a fine of up to $220,000, or both