This podcast is a general introduction to the safe harbour from insolvent trading that is now available for company directors. It is particularly useful to directors of small-to-medium sized businesses looking for a general understanding of the new carve-out.
In September 2017 a new safe harbour from insolvent trading was introduced to help company directors undertake informal restructures during insolvency. It is the only carve-out to the duty of company directors to cease trading when a company is insolvent. The new safe harbour from insolvent trading represents a significant watering down of the insolvent trading prohibition and is an alternative to a formal appointment of a voluntary administrator or liquidator.
Ben Sewell of Sewell & Kettle Lawyers is interviewed in this podcast by Heide Robson from Tax Talks (https://www.taxtalks.com.au/). Tax Talks is a podcast series for Australian professional accountants.
Podcast on the new safe harbour for directors hyperlink –https://www.taxtalks.com.au/safe-harbour-for-directors/
Click on the play button below to listen to the podcast
Topics of discussion include:
- Summary of the new reform
- What is the prohibition on insolvent trading for company directors?
- New rules but no specific process for the safe harbour mandated
- What is the “better outcome” test?
- This is not a Chapter 11 reform but a step towards it
- One size does not fit all
- Key hurdle is tax return lodgement and payment of employee entitlements
- Getting advice from an “appropriately qualified entity”
- What is a solicitor’s potential role?
- What is a turnaround plan?