Many businesses around the world are working hard to keep their financial position stable. While some industries have been hit more than others during the global health crisis, it’s safe to say that the threat of going under is a genuine concern among many business operators.
When a company is in financial distress, company directors play a crucial role in the legal and compliance space. They will be keen to ensure that they avoid the risk of personal liability for reckless trading. Company directors must also comply with all their other statutory and common law duties.
For directors of a company experiencing financial hardship, it can be easy to land themselves in hot water if they do not have the right legal guidance at hand.
The Practical Law New Zealand Resource Centre has provided Legal Insight with a complimentary checklist to share with readers. This ‘dos and don’ts’ guidance note is available just by downloading it here on this page. Below is a summary of what to expect.
What’s in Practical Law New Zealand’s ‘dos and don’ts’ checklist?
Written by a New Zealand subject matter expert and experienced lawyer, in this legal asset you will find:
- Practical steps that directors should take to ensure they are in compliance with their duties, for example keeping a written record of all meetings held to talk about the company’s financial position, and
- Things to avoid doing as a director of a company in financial distress, such as putting your head in the sand and ignoring events like creditors putting pressure on you to pay them.
Whether your company is listed on the New Zealand stock exchange or is a small family business, financial distress must be handled carefully. Access your free, legal resource from Practical Law New Zealand today.