Safe Harbour plans

We are highly skilled at providing specialists services to directors and boards within the Safe Harbour framework afforded under section 588GA of the Corporations Act 2001.

We have been engaged as safe harbour advisers for numerous boards and directors in developing and implementing plans for restructuring to improve the financial outcomes.

The safe harbour provisions commenced on 19 September 2017 and protect directors from personal liability for debts incurred by an insolvent company if, after a director starts to suspect that the company may become or is insolvent, the director starts developing a course of action that is reasonably likely to lead to a better outcome for the company than the immediate appointment of an administrator or liquidator. For safe harbour protection to come into effect the director(s) must obtain advice from an appropriately qualified entity.

To access ‘safe harbour’ provisions in s588GA, directors must:

• Continue to meet their employee entitlements (including superannuation) and tax reporting obligations

• Be able to provide assistance and/or documentation if requested by an external administrator, and

• Start developing one or more courses of action that are reasonably likely to lead to a better outcome for the company than the immediate appointment of an administrator or liquidator.

Factors that will be considered to determine if the course of action was reasonably likely to lead to a better outcome are:

• Obtaining appropriate advice

• Maintaining proper financial records

• Keeping themselves informed of the financial position of the company, and

• Taking steps to prevent misconduct by officers and employees of the company.