Insolvent Trading, Charitable Companies and COVID-19

Abstract

The unprecedented crisis caused by the outbreak and rapid spread of COVID-19 has raised challenges for directors as concerns insolvent trading laws. The Federal Government recently announced temporary suspension of insolvent trading laws in order to ease the pressure on directors to enter their companies into administration out of personal liability concerns. The temporary relief will be available in relation to a debt incurred by the company if: (1) the debt is incurred in the ordinary course of the company’s business; (2) the debt is incurred during the six month period commencing 24 March 2020 (or a longer period prescribed by the regulations); and (3) the debt is incurred before any appo..