Complying with the law
In our experience, very few directors set out to break the law or to trade a business into insolvency. And yet it is common for a director of a company in financial distress to go close to or cross the line.
Why is that the case?
Most directors we deal with have a strong desire to comply with the law. The difficulty faced by directors when a company is in financial distress is that a whole new raft of laws is introduced and the director will not know those laws. Most importantly, directors will be unaware of the requirement to consider the position of creditors. But if you do not know what the fiduciary duties of a director are or what transactions you may or may not undertake when insolvent - how can you comply?
Also the stresses of running a company in financial distress are high. That stress will often lead to flawed reasoning and poor decision making.
If you would like a sounding board regarding the issues you face, CALL US NOW for CONFIDENTIAL FREE ADVICE.
If you'd like to read more, take a look at our page Key Legal provisions for Directors then call us.
