Insolvent Trading & Director’s Role

Simon Cathro

Insolvent trading is the law under the Corporations Act section 588G that says that if a company is insolvent and a director allows the company to incur a new debt, then the director can be made personally liable for the new debts incurred. The law makes directors responsible for ensuring that their company does not trade while insolvent.

Insolvent trading is the law under the Corporations Act section 588G that says that if a company is insolvent and a director allows the company to incur a new debt, then the director can be made personally liable for the new debts incurred. The law makes directors responsible for ensuring that their company does not trade while insolvent.

This video outlines the roles and responsibilities of a Company Director while company goes insolvent.

In this video, you will discover the following key points:

Avoid trading whilst insolvent.
What are the powers given to liquidators under the section 588 G of Corporations Act?
A Director may access protection from the consequences of insolvent trading.
A Director has a defence against insolvent trading claims as per Section 588H of the Act.
A Defence will apply to protect a Director from personal liability in an insolvent trading claim.
Safe Harbour option for Directors and its requirements.
Involving a Safe Harbour advisor.

Stamford Capital on the current lending and property market

Commercial Property Finance: A renewed sense of optimism After several years of turbulence, the commercial property finance market has entered 2025 with renewed, if cautious, optimism. The economic headwinds of recent years, including rising interest rates, global instability and shifts in asset class performance, prompted many investors and developers to

Meet Chris Bergin – New Principal at Cathro & Partners, Melbourne

We’re pleased to welcome Chris Bergin to Cathro & Partners. Joining the team in February 2025, Chris brings with him 18 years of experience across a broad spectrum of corporate and personal insolvency matters. His background includes work in voluntary administration, receiverships, liquidations, safe harbour advisory, and complex restructuring assignments.

Understanding Section 588FP of the Australian Corporations Act 2001: Security Interests in Favor of Company Officers

Section 588FP of the Corporations Act 2001 (Cth) addresses the validity of security interests granted by a company to certain related parties, particularly its officers. This provision is designed to prevent company officers from securing personal advantages over other creditors, especially in the period leading up to an external administration.

Insolvent Trading & Director’s Role

Simon Cathro

Stamford Capital on the current lending and property market

Meet Chris Bergin – New Principal at Cathro & Partners, Melbourne

Understanding Section 588FP of the Australian Corporations Act 2001: Security Interests in Favor of Company Officers

Subscribe

Get all the latest updates from Cathro & Partners