One of the most common questions business owners or directors ask us is “will I be personally liable for company debts?” There is a reason why this question is asked so often. It is because if a company director is found to be personally liable for debts of their business, then he or she may face serious consequences.
If your company is insolvent or likely to become insolvent, then the company, not you, will become liable to pay the company debts.
In addition, if you, as the company director, have failed to pay your employee’s PAYG withholding and Superannuation Guarantee payments, then you will be personally liable for these company debts. You may also be issued with a Director Penalty Notice ((DPN) by the Australian Taxation Office (ATO). If you have received a DPN, then you must act immediately. You have 21 days to respond appropriately and pay the company debts or the Commissioner of Taxation will hold you personally liable and can face criminal and civil penalties. If you can’t pay the debts you may wish to appoint a liquidator within the 21 day period.
If you are worried that you will become personally liable for company debts, then it is recommended that you speak to a professional for expert advice. CRS Insolvency Services are insolvency specialists who specialise in corporate insolvency appointments. We will provide free, expert advice that is unbiased and based on years of experience. If you would like to seek a free initial consultation, then please contact us on 1800 210 073.