Now I’ve made a proper investigation of our company’s financial position I think we may have been trading while insolvent for the past six or more months. Does that now make me liable for any of the company’s debts?
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Answer by Kelly Angus, Adelaide 5000 SA
- As a director you must make sure your company does not incur debts when it is insolvent.
- If you breached that duty the liquidator can take legal action against you to recover the amount of the debts incurred.
- If your company was trading while insolvent the claim can be made against you as a director personally. This will mean that you are personally liable to compensate the company for that amount.