Insolvent Trading Brisbane

Insolvent trading is illegal. In this case, if a director is caught insolvent trading, the liquidator may incur debts from the Directors if those debts are unpaid.

Insolvent Trading Brisbane - Digital Graphs outline some statutory defenses

THE CONSEQUENCES OF INSOLVENT TRADING BRISBANE

There are consequences and penalties of Insolvent Trading. These Include:

  1. Compensation
  2. Civil Penalties
  3. Criminal Charges

If you are looking at some statutory defenses, please review The Corporations Act.

Compensation Proceedings

If creditors loose their compensation proceedings, it can be initiated by ASIC, a liquidator or a creditor against the director personally. This can be made in addition to Civil Penalties.

These proceedings can potentially be unlimited, which can lead to bankrupting the directors. Once this happens, the director can no longer direct or manage a company.

Civil Penalties

If you are caught trading insolvent, pecuniary penalties can incur up to $200,000. These penalties will be charged against the director(s).

Criminal Charges

If a director is found guilty of trading insolvent, they will be subject to criminal charges, which can lead up to $220,000 or imprisonment up to five years, as well as both. If you are facing Insolvency, Safeguard Insolvency will help!

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