Directors: ignore the 31 December deadline at your peril!
The advent of COVID-19 pandemic saw Australia's insolvent
trading laws relaxed in March this year. In essence, legislation
was put in place suspending provisions that would otherwise hold
directors to account for trading while insolvent. Initially these
relaxed laws were to expire in September 2020, but recently that
protection was extended until 31 December 2020.
Undoubtedly the legislation achieved what it had
intended—It ensured directors did not feel pressured to
prematurely appoint external administrators and close the doors
through fear of insolvent trading exposure.
But as regularly is the case: the devil is in the detail.
