Advise Harry with reasons for the advice given

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Questions -

Q1. Masks R Us Pty Ltd is now trading unprofitably as a result of the actions of Tom and Dick stated above (in question 5). The company now has difficulty in paying its debts and is falling behind in its tax payments to the Australian Taxation Office.

Harry, as a director of Masks R Us Pty Ltd, is concerned about the increasing company debts and the difficulties in the company's cash flow to make timely payments.

You are an accountant. Harry consults you for advice on whether he can be personally liable, in these circumstances, for the company's debts under the Corporations Act.

Advise Harry with reasons for the advice given.

Q2. Assume a debtor has issued a statutory demand to Mask R Us Pty Ltd for the non-payment of a $10,000 debt.

Explain, with reference to the Corporations Act, the legal options available to the company in responding to the statutory demand and the legal consequences of ignoring the statutory demand?

Reference no: EM132566700

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