100+ YEARS IN AUSTRALIA: RSM started in 1922 as a husband-and-wife team selling bookkeeping systems.
100+ YEARS IN AUSTRALIA: RSM started in 1922 as a husband-and-wife team selling bookkeeping systems.
LOCAL EXPERTS: We have 32+ offices around Australia and many more locations serviced remotely.
LOCAL EXPERTS: We have 32+ offices around Australia and many more locations serviced remotely.
CLIENT CHOICE WINNER: RSM have been named the Best Accounting Firm at the Client Choice Awards for the last 6 years.
CLIENT CHOICE WINNER: RSM have been named the Best Accounting Firm at the Client Choice Awards for the last 6 years.

Understanding Safe Harbour Protection for Directors

Navigating financial difficulties can be one of the most challenging aspects of running a business. Directors often face the daunting prospect of personal liability if their company becomes insolvent. However, Australia’s Safe Harbour provisions offer a vital lifeline, allowing directors to steer their companies through troubled waters while protecting themselves from the risk of insolvent trading.

  What is Safe Harbour?  

Safe Harbour is a legislative provision under the Corporations Act 2001 that provides directors with protection from personal liability during insolvency, as long as they are actively taking steps to improve the company’s financial situation. This framework is designed to encourage directors to explore restructuring and turnaround strategies without the immediate threat of personal risk.

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If you’re concerned about your company’s financial health and want to learn more about how Safe Harbour could help, contact RSM today. Our experienced team is here to provide the guidance and support you need to protect your company and yourself during challenging times.

  Frequently asked questions  

  • Keep your books and records in order
  • Provide employee entitlements, including superannuation
  • Keep tax records up to date
  • Seek advice from a qualified restructuring advisor
  • Devise and document a restructuring plan resulting in a better outcome than an immediate liquidation
  • Comply with the plan

 

If you take these actions, you (as the director) may be protected against legal claims of insolvent trading.

Keep in mind that you cannot claim safe harbour for debts incurred before you have taken these actions.

When a company is in financial trouble, it often feels easier to ignore it or hope that it will all go away.

As a director, you may:

  • Avoid phone calls
  • Make promises you can’t keep
  • Feel out of control
  • Make irrational decisions
  • Suffer stress or depression

Safe harbour is an opportunity to recognise what is happening, stop and evaluate the situation, and develop a turnaround plan.

A restructuring plan is a formal arrangement between a company and its creditors and/or its shareholders. It may be used by companies facing financial difficulties that are capable of being rescued as a going concern (there is no need to wait for imminent insolvency).

What that plan looks like depends on your company’s unique situation.

But it offers you the chance to be proactive at a time when many directors are simply reacting to the whirlwind of events that usually follow the realisation of impending insolvency.
The ultimate outcome of a restructuring plan is to return your company (or part of it) to solvency and help you deal with creditor claims. Occasionally, it may result in an orderly wind-down of the company and liquidation.
 

  Client testimonials  

Our case studies highlight the successful restructuring and recovery strategies we've implemented for various businesses facing financial challenges. 

Each case study showcases our tailored approach to navigating complex situations, from insolvency to voluntary administration, demonstrating how we've helped clients stabilise, restructure, and achieve sustainable growth. 

Explore these real-world examples to see how our expertise can guide businesses through difficult times and create viable pathways for the future.

How can RSM help with safe harbour?

AS CERTIFIED ACCOUNTANTS AND EXPERIENCED BUSINESS ADVISORS, WE CAN:

  1. Explain safe harbour and how it works
  2. Evaluate your company’s situation
  3. Offer advice on challenges and opportunities
  4. Help you create a sound restructuring plan
  5. Keep you accountable

If your business does go into liquidation, you can use these measures as a defence against a liquidator’s claim that you allowed the company to incur debts while it was insolvent.

CONTACT US

Contact our safe harbour experts

GET IN CONTACT

We are here to help with honest, professional and tailored advice. To speak with a safe harbour expert at RSM, please fill out the form below.