Elizabeth Proust
Our insolvency laws are widely recognised as being among the harshest in the world. Unlike comparable countries, such as the UK and Singapore, where the law focuses on what directors are doing to try to turn a company around, Australia’s laws focus solely on the tipping point where a company cannot pay its debts at the point in time when they fall due.
Due to the personal liability implications for directors, the perverse result of this is that the Australian system pushes directors down the route of administration, irrespective of the longer-term viability of the company. This stifles innovation and potentially causes businesses to prematurely close their doors.
The governme…
Read the full article at: http://www.afr.com/opinion/columnists/safe-harbours-for-directors-would-see-more-business-set-sail-20170614-gwr4z7
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