With businesses around Australia compelled to meet extraordinary challenges throughout the Coronavirus epidemic, the Government has taken the decision to extend the temporary insolvency and bankruptcy protections until 31 December 2020.
The original scheme was clearly designed to make it harder for any creditor to force a business into insolvency in response to a statutory demand. It also relieves Directors of their personal liability in the event that a company is guilty of trading whilst insolvent which is contrary to the provisions of the Corporations Act 2001.
This follows a series of concessions that the Federal Government has implemented over the recent period – a period that has cast uncertainty on the future of business for many organisations.
Directors in particular have been the focus of protections including the temporary changes to disclosure laws for Directors and Officers regarding their forward looking statements under continuous disclosure obligations.
The Treasurer’s press release can be read here.
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