There has been an increase in company insolvencies in Australia. Startups and early-stage technology companies have not been shielded from this, with recent high-profile collapses including Tritium and Milkrun. In this article we discuss insolvent trading risks, the state of the startup market, unique risks to startups and the protections offered by the “safe harbour” under the Corporations Act.
While early-stage tech businesses do not necessarily fit the usual corporate stereotype (in terms of funding sources, cash burn, revenue runway and therefore risk), the businesses and their directors are subject to the same insolvency regime as companies in other sectors. Understanding insolvency triggers, directors’ duties and the potential ex…
Read the full article at: https://www.claytonutz.com/toolkits/from-red-to-black-2024/insolvency-and-tech-burning-bright-and-fast-the-cash-runway-challenge-and-navigating-insolvency
