Some owners frequently risk their family finances because they don’t fully understand their legal obligations as company directors.
Owners often structure a new business as a company (as opposed to a sole trader) for tax benefits and legal protection through limited liability.
But legal experts say many SME directors do not understand how the law (Corporations Act) applies to them and the consequences can financially cripple them for life. A common scenario is directors being personally liable for outstanding tax and employee superannuation even if it wasn’t their job to manage the bills.
Malcolm Campbell, managing partner at Dooley & Associates Solici…