COVID-19 Business Director Responsibilities

COVID-19 Business Director Responsibilities

As COVID-19 continues to become a prominent part of society especially during recent times, NGR Accounting is taking this time to ensure that business owners and individuals are updated on all COVID information and support.

This week, Nathan sits down with Liam Bailey to discuss director responsibilities and tasks during a lockdown.

Liam has 14 years’ experience in both corporate and personal insolvency. He has worked on numerous trades on administrations and successful Deeds of Company Arrangement. He also has extensive experience in the areas of hospitality, retail, property, manufacturing and construction.

Liam became a partner of O’Brian Palmer in 2014. He is a registered liquidator and a Trustee in Bankruptcy. Liam’s contact details are at the bottom of this blog.

Director Responsibilities don’t stop during a pandemic:

This lockdown differs from the one we entailed in 2020. Back in 2020 when the government provided stimulus packages to business and the economy, it came with legislative reform that made it more difficult to wind up companies and it was more difficult to enforce debt against these companies.

It’s important to note, that the current lockdown following public health orders has not changed a director’s duties and responsibilities to the business and its creditors.

In the previous lockdown, it came with a clause against insolvent trading, stating that as long as you’re acting in the ordinary cause of your business, there was a conditional indemnity that you could not be liable for insolvent trading.

None of these reforms have been duplicated in this lockdown. Meaning there are no get out of jail free cards this time around.

Here are some director’s duties that all directors need to be aware of:

  1. The duty to act in good faith and for a proper purpose.
  2. With proper care, diligence and professionalism with your duties.

As a director if these duties are wrongfully conducted there can be personal liability of your actions.


How accessing COVID Grants could help a director’s company stay Solvent:

It’s important to realise that these grants are effectively income for your business. It’s not intended as a handout to directors.

These grants are designed to ensure that businesses stay afloat during lockdown. Keeping your company afloat for the pure purpose of personally benefiting from these grants, also leads to a serious misconduct of a director’s responsibility.

If you have further questions regarding the grants and support available to business owners. Check out our recent video on COVID Business Grants and Support LINK


To liquidate now or later?

Now that we are 18 months into this pandemic as business owners, we are now more aware of the effects lockdown and public health orders have on businesses and the economy. The uncertainty that we experienced at the beginning of the pandemic in 2020 has now disappeared.

So, if the COVID release payments that are being handed out by the state Government are insufficient to ensure that your company is solvent, then your business has become insolvent. Putting off the liquidation of the company is only going to create adverse for the directors personally.

If these government grants are not helping your business to where it should be, then you need to start by taking action and obtaining professional advice now, to deal with your insolvent company.

Don’t be short sided by what is currently in-front of you. It’s all about the bigger picture, don’t assume that by being eligible to receive the COVID government grants will help a failing business stay afloat. The grants could be adding to your problems or masking issues that should be addressed.


If you have any further questions regarding your business and its solvency during this lockdown, reach out to Liam Bailey using the contact details below:

O’Brien Palmer Insolvency & Business Advisory

Address: level 9/66 Clarence St, Sydney NSW 2000

Phone: (02) 9232 3322