Federal Parliament introduces new Safe Harbour Laws


The Australian Government passed new Safe Harbour Laws in September 2017 which will soften the current harsh insolvent trading laws.  The current insolvent trading laws are designed to protect creditors from when a company director knowingly continues to trade when the company is insolvent. The purpose of the Safe Harbour Laws is to give company directors protection from “insolvent trading” so they can trade on with confidence without the risk of becoming personally liable for insolvent trading.  The new Safe Harbour laws do not remove the current insolvent trading laws, as they will remain, however if a company director successfully implements a Safe Harbour plan then they will not be personally liable for any insolvent trading claim if the company later becomes insolvent.


To be protected under the Safe Harbour Laws the director’s plans must reasonably lead to a better outcome for the company’s creditors as a whole.


So what do you need to do to have a better outcome?

Company directors will also need to seek professional advice from a suitable qualified professional to ensure that the Safe Harbour plan will lead to a better outcome. Whilst the legislation doesn’t define who is a suitable qualified professional, practice would suggest that they may be an accountant or solicitor who has experience in insolvency.


If you would like to stay informed about the latest insolvency news, our team of experts here at CRS Insolvency Services are always ready to help on 1800 210 073. Our toll-free hotlines are open 24/7 so there will always be someone available to help you.