Question: What personal liability do I have as director of my company?
A director of a company can be made personally liable if the company becomes ‘insolvent’ or has incurred a significant amount of debt, and if a court can prove that there has been ‘wrongful trading’ on the part of the director.
This involves finding out whether the director had reasonable knowledge of the company’s financial shortcomings and the unlikelihood of avoiding insolvent liquidation. If they did not take steps to minimise the loss to creditors they may be found of wrongful trading and be personally liable for losses.
Directors of companies are bound by the Corporations Act 2001. For a full list of director duties and potential breaches see our article.
Answered by Lachlan McKnight
Lachlan is the CEO of LegalVision, an innovative and tech-driven law firm. LegalVision is disrupting Australia's legal industry and transforming the way in which Australian businesses access legal services. He previously worked as a corporate lawyer and investment banker in London, Paris, Amsterdam and Hong Kong. Lachlan specialises in banking and finance, capital raising and startups.
Get in Touch
Fill out the form below and a LegalVision team member will be in touch shortly!
Top 20 Startups in Australia - 2018 LinkedIn Startups List
NewLaw Firm of the Year Finalist – 2018 Australian Law Awards
Law Firm of the Year Finalist – 2018 Australasian Law Awards
AFR Fast 100 List – 2018 Australian Financial Review
NewLaw Firm of the Year – 2017 Australian Law Awards
Customer Service Experience of the Year – 2017 Optus My Business Awards
We collect and store information about you. Let us explain why we do this.
What information do you collect?
We collect a range of data about you, including your contact details, legal issues and data on how you use our website.
How do you collect information?
We collect information over the phone, by email and through our website.
What do you do with this information?
We store and use your information to deliver you better legal services. This mostly involves communicating with you, marketing to you and occasionally sharing your information with our partners.
How do I contact you?
You can always see what data you’ve stored with us.
Questions, comments or complaints? Reach out on 1300 544 755 or email us at firstname.lastname@example.org