Director Liability Lawyers in Melbourne

When the company’s debts start looking for you

You signed up to limited liability. Then a Director Penalty Notice arrived, or a liquidator wrote asking about decisions you made last winter, or a landlord dug out the guarantee you signed in 2019. Company debt reaches directors by three main routes, and each runs on its own clock. We act for Melbourne directors on all of them, often on the same file. If any of these letters is on your desk, call 1800 130 120 today. The first call is free and we read the document with you on the phone.

The DPN: 21 days, and the type decides everything

A Director Penalty Notice makes you personally liable for the company’s unpaid PAYG withholding, GST and superannuation guarantee. The ATO has issued them aggressively since 2022, and the response depends entirely on which type you hold.

A non-lockdown DPN applies where the company’s lodgments were made on time, or within three months of the due date. You then have 21 days from the date on the notice to pay, or to put the company into voluntary administration, small business restructuring or liquidation, any of which remits the penalty. The clock runs from the date on the notice, whether or not you were home to receive it.

A lockdown DPN applies where lodgments were more than three months late, and no insolvency appointment removes it. The debt is yours. What is left to talk about is a payment arrangement, disputing the underlying assessments, or the personal insolvency options covered on our bankruptcy page. Negotiating that arrangement and testing the assessments sitting behind it is what our tax debt lawyers do, and it runs alongside the DPN response rather than after it.

Lodge on time even when you cannot pay. It is the cheapest piece of insolvency advice we give: on-time lodgment keeps a future DPN remittable, while a lodgment that slips three months turns a company tax debt into your personal debt before any notice even arrives.

Insolvent trading and the safe harbour

Insolvent trading law makes you personally liable for debts the company incurred while insolvent, if there were reasonable grounds to suspect the insolvency at the time. These claims arrive after the collapse, brought by a liquidator who has reconstructed the trading history, and compensation orders can run to hundreds of thousands of dollars. Boards under that kind of pressure tend to fracture, and once co-directors start blaming each other for the decisions that got the company here, you are running director disputes and an insolvency file at the same time.

The safe harbour is the working defence for directors of struggling companies. From the moment you suspect insolvency, you start developing a documented course of action reasonably likely to produce a better outcome than immediate administration or liquidation, usually a restructure, a sale, or a recapitalisation with proper advice behind it. It comes with conditions. Employee entitlements including super must be being paid, tax lodgments must be current, and the plan has to be real and actually pursued. It only protects debts incurred after the plan begins, and it cannot be built after the event. If your company is under pressure and still trading, the safe harbour conversation is the one to have this week, alongside the rescue options on our voluntary administration page.

Guarantees: the door you opened yourself

Most directors have signed more guarantees than they remember: the lease, the trade accounts, the equipment finance. Guarantees survive the company’s liquidation and are usually called on within weeks of it. During a voluntary administration, enforcement against you is paused, which is one reason timing an administration well matters. Outside that window, we defend guarantee claims on their execution, their terms and their quantum, and we negotiate them hard, because a guarantee creditor facing a contested Supreme Court claim will very often settle for less than the demand.

Bring us the letters

Call 1800 130 120 or use the form on this page. Whatever has arrived, whether that is the DPN, the liquidator’s letter or the guarantee demand, we will tell you what it means, what the deadline actually is, and what we would do in your shoes. Same-day response when a notice is running, and the company’s own position gets covered in the same call by our insolvency lawyers.