DIRECTORS take note - Sweeping, ad hoc changes to personal and corporate insolvency regimes as a result of COVID-19

DIRECTORS take note - the Government has made sweeping, ad hoc changes to the personal and corporate insolvency regime as a result of the COVID-19 crisis

The elements of the package are:

?       A temporary increase in the threshold at which creditors can issue a statutory demand on a company and the time companies have to respond to statutory demands they receive;

?       A temporary increase in the threshold for a creditor to initiate bankruptcy proceedings, an increase in the time period for debtors to respond to a bankruptcy notice, and extending the period of protection a debtor receives after making a declaration of intention to present a debtor’s petition;

?       Temporary relief for directors from any personal liability for trading while insolvent; and

?       Providing temporary flexibility in the Corporations Act 2001 to provide targeted relief for companies from provisions of the Act to deal with unforeseen events that arise as a result of the Coronavirus health crisis.

For owners or directors of a business that are currently struggling due to the Coronavirus, the ATO will tailor solutions for their circumstances, including temporary reduction of payments or deferrals, or withholding enforcement actions including Director Penalty Notices and wind-ups.

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