Most directors whose companies are subject to external administrations, will escape being banned from managing other corporations. However, if you have been involved in two or more liquidations within a certain time period, ASIC may seek to have you banned from managing corporations for a period of time.
If the company has traded whilst it was insolvent, a liquidator is obliged to consider issuing insolvent trading proceedings against directors in certain circumstances. Directors should always seek their own legal advice if they are being sued for insolvent trading.
As well as for insolvent trading, mentioned above, a director can become personally liable for company debts in the following circumstances:
- If the director provided a personal guarantee with respect to credit provided by suppliers;
- If the director receives a Director Penalty Notice from the Australian Taxation Office with respect to PAYG or Superannuation not lodged or paid.
A director’s own personal credit file will record the event when a company goes into liquidation. Directors seeking to clarify their position on this point should seek their own legal advice from suitably qualified professionals.