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JLA Insolvency & Advisory

Director Responsibilities

Make sure that you are aware of your responsibilities as a director.

Overview

Who is a director?

Under the Corporations Act a director is not only a person who has gone through the formal process to sign on as a director but can also include individuals who act in the role without being formally appointed.

What this means is that if you are in a position of authority in a company and you are directing the operation of that company but have not officially become a director then ASIC may well treat you in the same way that it would treat an actual director if the company were to get into difficulties.

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General duties

General duties as a director

So what are your duties if you are an official or deemed director of a company.

  • You have a duty to ensure that the business complies with general and specific laws.
  • You have a duty of responsibility to the shareholders of the company and to ensure that the company is operated according to their best wishes.
  • If the company is at risk of becoming insolvent then you have a duty to the creditors of the company.
  • Again, if there is a risk of insolvency then you have a duty of care to the employees.
  • There is a duty to ensure that the company keeps appropriate records.
  • You have a duty to ensure that the company does not trade while insolvent.
  • You have a duty to exercise your powers in a reasonable manner.
Warning signs

Indicators of insolvency

So what are the indicators of a company that could be insolvent.

  • The company does not have sufficient current assets to cover its current liabilities.
  • Unpaid tax or Superannuation liabilities.
  • Significant ongoing losses.
  • Inability to raise finance from your bank or financial institution.
  • Inability to raise finance from shareholders.
  • Incomplete financial records.
  • Poor cash-flow and lack of cash-flow forecasting.
  • Large unrecoverable debts.
How JLA helps

Practical guidance from first contact to outcome

Assess the position

We review the immediate circumstances, stakeholders, risks, documents and timing so the situation is understood before decisions are made.

Explain the options

We explain available pathways in plain English, including the practical consequences of each option and what may happen next.

Implement clearly

Where an appointment or formal process is required, we communicate clearly and focus on practical, commercially sensible outcomes.

Typical process

What usually happens

Every matter is different, but most engagements follow a clear sequence of review, communication, implementation and reporting.

1

Initial consultation

JLA listens to the circumstances and identifies the immediate issues, stakeholders and time pressures.

2

Review and assessment

Relevant information is reviewed so the available options and risks can be understood.

3

Communication

Stakeholders are contacted where appropriate and the process is explained clearly.

4

Implementation

The agreed strategy or formal process is implemented with attention to compliance and practical outcomes.

5

Ongoing reporting

Progress, decisions and next steps are communicated throughout the engagement.

What to do next

What to do if you suspect insolvency

If you think that you may be in a position where you are currently breaching or suspect that you may breach your directors responsibilities in relation to insolvency then you need to get expert advice as soon as possible.

Jamieson Louttit and Associates are expert insolvency advisors who can give you unbiased advice in terms of what your options are, what your next steps should be and how to minimise your liability.

Call us today on 02 9231 0505 for a free initial discussion in terms of how we can help you.

Free initial discussion

Call 02 9231 0505 today for a free, confidential discussion about your situation and how we can help.

Contact JLA

Speak with an insolvency specialist.

If this situation affects you, your business or a company you deal with, confidential advice can help clarify the next step.

JLA Assistant Confidential first step — no advice, just connection.
Company name
ACN / ABN / Status
We found available intelligence for this company:
0ASIC documents
0Insolvency notices
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0Related entities
Full report can include:
  • ASIC document history
  • Insolvency event timeline
  • Court event details
  • Related entity intelligence
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