Question

Akilesh is director of a company which has had two years of poor trading and is now unable to pay its debts when they fall due. Akilesh seeks your advice on the options available in the circumstances. He is concerned the company may be insolvent but is hopeful that Darwin economy will improve and his business will flourish soon. (a) Explain the options available to Akilesh if he suspects the company is insolvent. What would be the potential benefit to him if he appoints a Voluntary Administrator? (b) What sort of risks could Akilesh face if he borrows more money to help the company but then can’t pay it back? Your answers must refer to the relevant sections of the Corporations Act 2001 (Cth) and case law.

Answer 1

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