Welcome to Dissolve This video addresses issues about a very common
area of concern for directors and that’s Insolvent Trading; So what is Insolvent Trading? – Let’s have
a look at a definition “If a company is insolvent and the directors
continue to incur new liabilities, then the director can be personally liable for those
new liabilities” So let me make two points First, yes, your house is on the line Secondly that action can be taken by each of:
the Liquidator a creditor or even ASIC So the concept is pretty straightforward but
it does get complicated One of the main complications is figuring
out whether or not your company is insolvent. There is a lot of case law on that topic but
we’ve tried to make it easy for you Have a look at our page Is my company insolvent? You can get there by using the URL on the screen behind me
or if you are watching this from our website then you’ll see the button on the right
hand side of this page Let have a look at some technicalities.
Number 1 — you’re only liable for debts incurred after the date of insolvency, so thats not
all debts; Number 2 — you will have some defences, they’re a little complicated so I wont go into that in any detail now So here’s some tips for you if you are concerned
your company might be trading while insolvent. Firstly, do what the law says, which is don’t incur new debts if you can’t pay for them How do you do that — the easiest way is
to move to a COD basis Or if you do incur new liabilities, make sure you pay for those ones first. Finally an extra tip for you If you think you have a viable business that is just suffering some short-term difficulties, you might want to consider a Voluntary Administration. We have a separate page and video on that topic. Thank you.