The increasing spread of COVID-19, and now the unprecedented measures being taken by governments to slow that spread, is having and will continue to have a significant impact on economies around the globe, including Australia. As the situation has not been seen before, it is difficult for businesses and individuals to plan ways to limit the impact on their ability to continue trading – and pay their debts.
In recognition of the unique challenges facing businesses today, the Australian Government has responded by acting to relax laws relating to insolvency.
Key points for businesses and individuals to be aware of include:
Businesses and individuals will remain liable for debts incurred in this period.
The bill is currently before Parliament and will likely be passed this week.
At this point in time, it appears that the measures will apply for a period of six months. The amendments, as currently proposed, will not be retrospective but will apply from the date the amendments commence.
The full government fact sheet explaining the changes can be found here.
This is an evolving situation, and businesses still need to be mindful of their obligations as directors to avoid insolvent trading (among other matters). More than ever, it is important to understand your obligations and how to act to protect yourself and your business in these trying times – being on the front foot and acting swiftly can be the difference between a positive outcome, and the winding up of your business.
The information in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, we do not guarantee that the information in this newsletter is accurate at the date it is received or that it will continue to be accurate in the future.