Company directors must adhere to a range of duties to ensure that their risk of being held personally liable for company debts is minimal. With this year being amongst the toughest yet since the global financial crisis of 2008, it’s important to ensure that your business is protected.
As a company director, it is your duty to be proactive when it comes to your business’ debts and paying tax. Paying down as many debts as you can is important in order to reduce gearing levels. If you are worried about the level of debt that you owe, don’t sit on the fence – be proactive and take action. Selling non-core or surplus assets can be just one of the best ways to free up capital for reducing debt.
If you are about to accept a position as a new company director or are forming your own company, it is important that as part of your due diligence, you ensure that the company’s PAYG and superannuation guarantee obligations are covered. If these obligations are not covered within thirty days of you joining or forming a company as a new director, you will become liable to a director penalty. PAYG and superannuation compliance procedures should be reviewed regularly in order to minimise risk.
Getting Director’s Insurance can help to limit your exposure to risk if anything goes wrong with PAYG and superannuation procedures. As the consequences of delay can often be irreversible, having insurance in place to protect yourself should anything go wrong can save both yourself and your business from a lot of financial damage. Speak to your lawyer or an insurance broker about the options which are available when it comes to insuring yourself as a director.
In many cases, directors and other taxpayers seek advice far too late, simply because they are not aware of or do not fully understand the consequences that result from late reporting, delays, or even the fact that the ATO can and will use statements made by you as evidence against you. Because of this, it is vital that you seek professional advice as soon as possible if tax and superannuation debts cannot be paid. In doing so, you can save yourself a lot of money and trouble.
As a company director, it’s your duty to ensure that all tax and superannuation bills and debts are paid correctly.
For more information on your role, duties and obligations as a Company Director, please call Odile Mignot at AVB on 1300 123 181.
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