The Federal Government’s National Innovation and Science agenda has introduced draft legislation as follows:
- “safe harbour” regime for company directors from personal liability for insolvent trading if the company is undertaking a restructure.
It is intended to encourage directors to engage early should a company into financial distress or hardship and take reasonable risks to facilitate the company restructure rather than placing the company prematurely into voluntary administration or liquidation.
The defence will apply to debts incurred when the director starts taking a course of action and ends when the course of action ends or stops being reasonably likely to lead to a better outcome for the company and the company creditors or the company goes into administration.
The key driver appears to be that directors are encouraged initiate early intervention and proactive action and communication with all stakeholders.
Maximise Capital offers experienced, qualified team of professionals that will enable directors to rely of the “Safe Harbour” defence and more importantly provide you with guidance and skills to turnaround and restructure your business.