Directors of Australian companies face significant personal monetary -- and potential criminal and adverse professional -- consequences if they allow the company to trade whilst insolvent.
Australian insolvent trading laws are harsher, and more frequently utilised to prosecute directors personally, than in many other jurisdictions including in the US and the UK.
Accordingly, frequent assessment of a company's solvency by its directors is crucial, particularly in financially difficult times, as are active steps to address any potential insolvency.
Directors of Australian companies face significant personal monetary − and potential criminal and adverse professional - consequences if they allow the company to trade whilst insolvent.
Australian insolvent trading laws are harsher, and more frequently utilised to prosecute directors personally, than in many other jurisdictions including in the US and the UK.
Accordingly, frequent assessment of a company's solvency by its directors is crucial, particularly in financially difficult times, as are active steps to address any potential insolvency.
In a recent decision 9354-9186 Québec inc. v. Callidius Capital Corp, 2020 SCC 10 , the Supreme Court of Canada affirmed that:
What a director wanting to enter the safe harbour must do
Directors in Australia have long had a statutory duty to prevent insolvent trading. The duty is engaged where:
Colombian State of Emergency
The president of Colombia decreed a State of Emergency on the national territory due to the recent COVID-19 outbreak. He has issued a series of measures to contain its effects on public health and the economy. This chapter will be updated on a daily basis, including the principal measures issued by the national government.
On 30 January 2020, the World Health Organization declared that the coronavirus outbreak constituted a public health emergency of international concern. The PRC and Hong Kong have been at the forefront of the coronavirus outbreak.
02 Employment and Pensions
2.1 Whilst some COVID-19 measures relating to employment are adopted globally (e.g., self-isolation and working from home), the implementation of such measures and employment protections vary per jurisdiction. For the latest employment law guidance, we recommend that you read our latest Global Employment Guide, which covers 11 key questions across 41 jurisdictions.
2.2 Now
On 30 January 2020, the World Health Organization declared that the coronavirus outbreak constituted a public health emergency of international concern. The PRC and Hong Kong have been at the forefront of the coronavirus outbreak.
In brief
The North America Tax Practice Group presented The Future of IP Planning, the fourth webinar in the series The Importance of Tax in the Response to COVID-19 on 1 May 2020.
1. Nature of process
Chapter 11 used to effect operational restructuring, deleverage balance sheet, and/or commence asset sale of the business as a going concern
Insolvency Act process primarily used to effect a pre-packaged sale of the business or assets effected by administrators (i.e. external qualified appointees).