Advisory

Our team are regularly engaged by Director’s/ individuals to provide holistic advisory services to protect their business/ personal interests. We work closely with our network of legal advisors to ensure a commercial and timely response to actual or potential claims and threats. These claims may be commenced by a Liquidator, Registered Trustee in Bankruptcy or various Regulatory/ Government departments.

The safe harbour regime is aimed at providing directors protection from a potential insolvent trading claim while undertaking a company restructure without a formal insolvency process. For safe harbour to apply, directors (with the assistance of an ‘appropriately qualified’ person) must formulate an action plan that provides a better outcome for the company as opposed to appointing an external administrator.

Directors cannot access safe harbour when: 

• the company has outstanding employee entitlements (including superannuation); and

• the company has not complied with all of its Australian Taxation Office reporting requirements and lodgements.

The safe harbour ceases to apply when:

• Directors do not take the course of action within a reasonable period of time.

• Directors stop taking the planned course of action.

• It is no longer reasonably expected that the course of action will lead to a better outcome for the company.

• A liquidator or administrator is appointed to the company.

Should you require assistance with formulating a Company restructure which enables Director’s to take advantage of the protections afforded under the Safe Harbour legislation, contact our office.

If a company fails to comply with their obligations to pay its tax debt by the due date for payment, company directors can be held personally liable for the amount the company should have paid. Under certain circumstances, the ATO can force a director of a company that is unwilling or unable to meet these obligations, to personally pay those debts. This is done through the issuance of a director penalty notice (DPN).

Directors are liable to pay if they: 

• were a director when the company failed to pay the tax debt on the date it was due; or

• became a director after the date the payment was due and they are still a director 30 days after the amount was due, but is still unpaid.

The ATO is able to issue a DPN to a director who has resigned before issuance of any notices.

Should you require assistance with responding to a DPN, contact our office.

When a business goes into liquidation or bankruptcy, parties can receive a demand from the Liquidator or Registered Trustee in Bankruptcy for repayment of monies paid to them (known as voidable transactions).

Types of voidable transactions include:

• unfair preferences, uncommercial transactions

• monies or assets received when the business is insolvent

• assets transferred at undervalue or no consideration

The most widely used defence to a voidable transaction claim is that the transaction was received in good faith (ie: you acted in good faith and did not know the business was insolvent). There are up to 20 other possible defences to voidable transactions (depending on the type of claim).

Should you receive a demand from a Liquidator or Registered Trustee in Bankruptcy we can work with you to manage your response by providing expert support and investigation services. Or should you have a customer who you suspect may be in financial difficulty, we can help reduce your risk of receiving one of these demands.