Every director of an Australian company is under a legal duty to prevent the company incurring a debt when the company is insolvent (or where that debt will cause the company to become insolvent).
The Australian Securities and Investments Commission's (ASIC) new Regulatory Guide sets out four key principles which directors should follow to meet their obligation to prevent insolvent trading.
The Regulatory Guide also sets out ASIC's approach to assessing whether a director has breached their duty.
Background
Filed under:
Australia, Company & Commercial, Insolvency & Restructuring, Hall & Wilcox, Security (finance), Breach of contract, Board of directors, Accounting, Debt, Balance sheet, Cashflow, Liquidator (law), European Commission, Australian Securities and Investments Commission, The Australian, Constitutional amendment, Corporations Act 2001 (Australia)
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