It is imperative under Australian Legislation that a director of a company that is insolvent or likely to become insolvent in the foreseeable future acts responsibly. Australian Corporate Legislation specifically states that a director must not trade a company whilst insolvent. There is a fiduciary duty upon a director to take action in these circumstances. This may involve appointing an administrator or liquidator.
It is imperative a director seeks immediate advice on the Company's solvency status and options available.
Timely advice usually results in more options being available to the company and mitigates further losses to key stakeholders. Shaw Gidley can help find a solution.