16 January 2013 | Reading time: < 1 minute
The proliferation of cases involving directors duties (and breach of duties) in recent times has led to a very real need for directors to be properly advised as to their roles, responsibilities and obligations when it comes to the management and operation of privately owned companies.
Here are 5 reasons why directors must be careful in the manner in which they ‘go about their business’:
1. Personal liability for unpaid PAYG, GST and superannuation payments due by the company;
2. Personal liability for failure to ensure accuracy of company accounts;
3. As a result of the continuing credit squeeze, directors face personal exposure for personal guarantees now seemingly the normal requirement for banks and other lenders;
4. Some personal superannuation contributions (made by directors to their own super funds) are not protected in cases of personal insolvency (ie bankruptcy); and
5. Changes to securitisation over personal property (Personal Property Securities Act) have complicated the task of directors ensuring company assets are protected.
Directors are having to work harder and harder to earn their keep. Indeed many people, for the reasons above, are less and less willing to accept a once coveted seat at the table.