Being in business, it’s important to know where you stand personally and professionally, in all facets of running a business.

Whether it’s being across the human resources and employment policies/standards for the business, compliance, or in the legal sphere, whether as a company director, you’d ever be liable for the company’s debts in a worst case scenario.

As the saying goes, knowledge is power, and having knowledge puts you in a position of power because it gives you the ability to survive and thrive in their environment.

As a company director, you have a better ability of making informed decisions and think things through logically and ethically.

When considering your potential liability as a company director, this is where research, understanding and good legal connections come into play.

Having contacts like TY Lawyers in Chatswood, who are experienced small business lawyers and commercial litigation lawyers in Chatswood, is key.

Let’s take a look into some examples of when a company director could be liable for a company’s debts.

Things Company Directors Could Be Liable For

• Company directors may be liable for debts incurred by the company if the company finds itself in a position of not being able to pay debts when they are due. 

• Another example of a way a company director could become personally liable is if as the director, you breach your duties and your actions cause the company to suffer some type of loss.

If you’re found to have been acting illegally or in breach of the law, you may find yourself having to compensate the company for the loss.

This is another reason why it’s important to know a trustworthy commercial litigation lawyer or small business lawyer, like TY Lawyers in Chatswood, as they can give you all the information you need to ensure you’re acting within the law and ensuring you’re completing your duties as a company director.

They can also assist if you do find yourself in trouble and can advise you on how you can move forward with your best interests in mind.

• Thirdly, you may be personally liable as a company director for any outstanding tax obligations of the company, especially if the company has employees. Company director’s need to ensure taxation and superannuation obligations are met. 

• Lastly, if personal asset guarantees (e.g. a home) are given to secure a loan for the company, if the company does not pay the loan, the bank could enforce its right to recover the loan by taking possession or selling the home.

Becoming the director of a company is an important role, and the responsibilities and obligations of such a role should be taken seriously.

New Director ID Requirement

There is now a new identification requirement for directors, required by law, called the ‘Director ID’, which is a unique director identification number assigned to any person who has the title ‘Director’ in a company or trust.

This applies to existing companies and to any new companies in Australia. 

TY Lawyers Chatswood

Our commercial litigation lawyer team in Chatswood provide assistance, guidance, advice to clients and are here to help.

We’re also small business lawyers who can help with your commercial legal requirements.

If you have an enquiry on a commercial litigation matter, get in touch today!

Call TY Lawyers Chatswood on: (02) 8007 0135.