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Safe Harbour Bankruptcy Laws Not Being Accessed By Start-up Directors

Safe Harbour bankruptcy laws not being accessed by Start-up Directors

The Director’s Safe Harbour laws were introduced last year. These were written to protect directors of new and existing companies from being personally liable for insolvent trading.  However, Perry Gavin from legal firm Bartier has said that the intent of the laws has always been welcomed; but in practice small companies were finding the safe Harbour too hard to access.

Small to medium sized companies are finding it hard to deal with the complexity, cost and confusion of how the safe harbour laws apply to their company.

Part of the requirements for a struggling company to be able to access and comply with the safe harbour laws are that they have to be up to date with their employee payments and not owe any money to the ATO.

With access to advisory costs looking to take advantage of the safe harbour legislation, the ATO is not at the top of the creditor’s list and companies forgo paying.

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Source: Australian Financial Review

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