There is no doubt that the economic fallout from COVID-19 will touch every single Australian business – big, small and medium. Through no fault of management, many businesses may not survive… Let’s face it, we are all in uncharted waters.
As many directors and business owners are consumed with understanding what the short term future looks like from a financial perspective, one course directors can consider is ‘safe harbour’ protection.
Safe harbour protection provides an opportunity for directors to turn around a financially distressed business without risking personal liability from insolvent trading.
Typically, the protection comes about from steps directors can take now:
- Develop and follow a plan or a course of action
- Engage a suitably qualified expert to formulate the plan
- Ensure the plan or course would likely lead to a better outcome (than liquidation)
- Continue to pay all employee entitlements (including super), and
- Continue to report tax obligations.
Read more about safe harbour protection in this PDF by the Australian Restructuring Insolvency and Turnaround Association (ARITA).
Contact us today if your business is under stress, and we can help you gain clarity and direction.
Disclaimer: This information is general in nature and should not be relied on as advice. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs and seek professional advice before making any decisions based on this information.