One of the first things Malcom Turnbull announced when be became Prime Minister was science and innovation initiatives. He also promised support for Company Directors saying he had seen many businesses go down that could have been saved.
With current legislation many directors prefer to appoint a liquidator, or an administrator to avoid, or limit their personal exposure.
This causes a bias to shut companies, and destroy jobs and organisations, as the liquidator has too much control otherwise.
As a response, Federal Treasury has released the 'Improving Bankruptcy and Insolvency Law Proposal Papers' and as part of the National Science and Innovation Agenda reforms announced by the Prime Minister last year.
Some of the key proposed reforms are:
- A Safe Harbour for directors
- A prohibition of Ipso Facto Clauses
We have seen business with 50 or more employees shut by liquidators, and directors lose personal assets when it was entirely unnecessary.
This is one reform that Turnbull can deliver that will create more jobs without the need to collapse companies. This reform is more important for business than the industrial law changes that caused the double dissolution.
Terry Murphy CPA BBus DFP, Director of TaxAssist Accountants
By Terry Murphy
Last updated August 2016