Practice Areas / Business & Insolvency
Business & Insolvency Lawyers
Advice for business owners, directors and creditors across Melbourne, Frankston and the Mornington Peninsula, from setting up a company to dealing with financial distress. Advice is also available in Polish.
From setting up to stepping away
The decisions made when a business starts, such as its structure, who owns it and what the owners have agreed, shape what happens when it grows, is sold or runs into trouble.
We advise owners, directors and creditors at each stage, including when a company is struggling to pay its debts and time matters. Radek Dajer advises on each matter directly, and Polish-speaking business owners can discuss their affairs in Polish.
How we help with business and insolvency
Structures and set-up
Sole trader, partnership, company or trust: choosing the structure, registering the company and business name, and preparing governance documents.
Owners' agreements
Shareholder and partnership agreements covering decisions, funding, deadlock, exits, and what happens if an owner leaves, dies or falls out.
Buying or selling
Due diligence, sale contracts, restraints of trade, employees and the premises lease, through to settlement, for buyers and sellers.
Insolvency advice
Advice for directors of struggling companies and their creditors on statutory demands, restructuring, administration, liquidation and director penalty notices.
Setting up, running and selling a business
The right structure depends on risk, tax, ownership and your plans. We work alongside your accountant so the legal and tax advice fit together.
- Company set-up: registering the company with ASIC, its constitution, shares and registers. New directors must apply for a director identification number before they are appointed.
- Shareholder agreements: decision-making, funding, dividends, deadlock, restrictions on selling shares, and how shares are valued and bought if an owner leaves, dies or loses capacity.
- Partnership agreements: without one, the default rules in the Partnership Act 1958 (Vic) apply, including equal sharing of profits, and each partner can bind the firm in the ordinary course of business and is liable for its debts.
- Buying or selling a business: due diligence on the business, its contracts, staff and assets, the sale contract and restraint of trade, and assignment of the premises lease, which follows a set process where the Retail Leases Act 2003 (Vic) applies.
- Larger acquisitions: since 1 January 2026, acquisitions meeting monetary thresholds must be notified to the Australian Competition and Consumer Commission and cleared before completion. Most small business sales fall below the thresholds, but they can apply where the buyer is part of a large group.
Directors' duties
Directors of every company, including a family company with one or two directors, have duties under the Corporations Act 2001 (Cth). A breach can lead to civil penalties, disqualification and personal liability.
- Care and diligence: acting with the care and diligence a reasonable director in the company’s circumstances would show, which includes understanding the company’s financial position.
- Good faith and proper purpose: acting in good faith in the best interests of the company and for a proper purpose, and not misusing your position or company information for your own or someone else’s gain.
- Insolvent trading: a director can be personally liable for debts the company incurs while insolvent if there were reasonable grounds to suspect insolvency, unless a defence or the safe harbour applies.
- Director penalty notices: directors can be personally liable for the company’s unpaid PAYG withholding, GST and superannuation (the superannuation guarantee charge), and new directors can inherit existing liabilities unless the company acts within 30 days of their appointment.
Received a director penalty notice?
The 21 days to act start on the day the ATO posts the notice to your address on the ASIC register, not the day you open it. If the debts were reported on time, paying them or appointing an administrator, liquidator or small business restructuring practitioner within that period can remit the penalty. If PAYG withholding or GST was reported more than three months late, generally only payment will.
Insolvency advice for directors and creditors
When a company cannot pay its debts as they fall due, its options narrow quickly. Early advice gives directors more choices and creditors a better chance of being paid.
- Statutory demands: a creditor owed a due and payable debt of at least $4,000 can serve a statutory demand on a company. The company has 21 days from service to pay or apply to court to set it aside, and the court cannot extend that time. If it does neither, it is presumed insolvent and can be wound up.
- Small business restructuring: a company with total liabilities of no more than $1 million can appoint a restructuring practitioner and put a plan to creditors while the directors stay in control. Employee entitlements must be paid and tax lodgements up to date before the plan goes to creditors.
- Voluntary administration: an independent administrator takes control, most creditor claims are put on hold, and creditors then decide whether the company enters a deed of company arrangement, returns to the directors or is wound up.
- Liquidation: a liquidator sells the company’s assets, distributes the proceeds to creditors and may bring claims such as insolvent trading and unfair preference claims. We advise directors on their obligations and exposure.
- Creditors and individuals: proofs of debt, enforcing security and creditors’ meetings, and advice on bankruptcy under the Bankruptcy Act 1966 (Cth).
Starting, selling or under pressure?
Book a consultation to talk through your plans or your company’s position. If you have received a statutory demand or a director penalty notice, contact us straight away: the time limits are short.
Common questions
Can’t see your question? Call 1800 776 529 or send us a message.
A sole trader structure is simple, but you are personally liable for every business debt. A company is a separate legal entity that can limit your exposure, although directors are often asked to sign as personal guarantors for finance and leases, and have their own duties. Tax plays a large part, so we work with your accountant.
Yes, arguably more so. Disputes between owners usually arise when circumstances change, such as one owner wanting to leave, stop working in the business or sell. A shareholder agreement records what you have agreed while everyone gets along, including how shares are valued and bought out, and can save a costly dispute later.
If the company does not pay, secure or compound the debt, or apply to set the demand aside, within 21 days of service, it is presumed insolvent and the creditor can apply to have it wound up. A company that disputes the debt must apply within the 21 days, even if it thinks the demand is defective.
Safe harbour protects directors from personal liability for insolvent trading while they develop and take a course of action reasonably likely to lead to a better outcome for the company than immediate administration or liquidation. Getting advice from an appropriately qualified adviser is an important factor. It is generally unavailable if the company is not paying employee entitlements, including superannuation, or is not up to date with tax lodgements.
Yes. Radek Dajer speaks Polish and can advise on setting up, buying or selling a business, shareholder agreements and insolvency in Polish. This helps where family members involved in the business are more comfortable in Polish. See our Polish-language services.
Business law insights
Australian directors owe clear legal duties under the Corporations Act 2001. Learn what those duties are, what the business judgment rule means, and how to avoid personal liability.
When a debtor fails to pay, knowing the correct legal steps can mean the difference between recovering your money and writing off the debt entirely.