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ARTICLE · 03 JULY 2026

Can I Run A Business While Bankrupt?

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Bankruptcy imposes significant legal and commercial restrictions on business operations in Australia, affecting credit access, asset ownership, income reporting, and directorship eligibility. Understanding these limitations is crucial for business owners to avoid costly mistakes that could extend bankruptcy periods or trigger recovery proceedings.

AustraliaInsolvency/Bankruptcy/Re-Structuring
Wayne Davis
Wayne Davis
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Article Summary

Bankruptcy does not automatically prevent a person from running a business in Australia, but it does impose significant legal and commercial restrictions that can create serious consequences if misunderstood.

While a bankrupt individual can generally continue working and operating as a sole trader, restrictions under the Bankruptcy Act 1966 (Cth) and Corporations Act 2001 (Cth) may affect access to credit, ownership of business assets, income reporting obligations, and the ability to act as a company director.

Trustees may investigate assets, transactions, and business income, and non-compliance can lead to recovery proceedings, penalties, or an extension of the bankruptcy period.

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The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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