Australian governments have put in place certain measures and recommendations with a view to containing the spread of coronavirus. These measures, which are likely to continue for some time, will affect many small, medium and large sized businesses.
The question of who is an officer of an entity is an important matter to understand. The law imposes duties and responsibilities on directors and officers who may, for example, be exposed to criminal liability, liability for breach of duty, or claims for insolvent trading.
The latest strain of coronavirus is not only a health concern. It is also affecting contracts, insurance policies and other agreements. Businesses are relying on force majeure clauses and other contractual devices to protect themselves from the fallout.
Changes to company laws has tightened regulation of Australia’s company law landscape, targeting illegal phoenixing and extending director liabilities. It’s estimated that the annual direct impact of phoenixing activity costs the Australian economy between $2.85 and $5.13 billion.
If you’re not an officially appointed company director, you may be operating as a shadow director, or de facto director. You need to be aware of your legal obligations, especially if there’s a question of insolvency or fraud.