SV Strategic Solutions – Safe Harbour
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What is safe harbour?
The Bill received Royal Assent on 18 September 2017 and under the legislative provisions the safe harbour laws came into effect on 19th September 2017 and the ipso facto laws will commence on 1 July 2018.
The purpose of safe harbour laws is to provide protection to directors from being personally liable for insolvent trading provided they genuinely attempted to restructure their company.
There are various penalties and consequences of insolvent trading including civil penalties, compensation proceedings and criminal charges. Taking the right steps and genuinely attempting to restructure the company will significantly reduce the risk of being liable. A Director would only be liable for insolvent trading, if it is shown that the Director did not take any action that could lead to a better outcome for the company and its creditors, rather than entering into a formal insolvency appointment.
If you suspect your company may be in financial distress, it is important to seek immediate advice. For a confidential consultation, call 1800 246 801.
Safe Harbour Laws came into effect 19 September 2017, are you aware of what this means for company directors? The SV Strategic Solutions team have created a brief summary of the criteria, click through to view.
As directors, you may have heard whispers about the new ‘Safe Harbour’ protection that is currently being reviewed in parliament – see our view below of the currently proposed legislation and what it means for company directors.