A co-director’s refusal does not remove the need to establish the facts, seek advice and document the steps you take.
Corporate Recovery Partners
01 / 06
A director discussion is being avoided while debts grow
Two directors run a plumbing company. One asks to discuss overdue tax and supplier holds; the other says raising insolvency will frighten everyone and refuses a meeting. New work continues to be accepted. The concerned director needs an informed response that respects the company’s governance arrangements without allowing silence to stand in for a financial assessment.
Prepare a concise list of due debts, available funds, notices and uncertain receipts. Send a factual request for a meeting with the relevant records attached. Avoid declaring a legal conclusion you cannot yet support.
Identify the decisions that cannot wait, such as new orders or payment promises. Explain how those decisions depend on information that is missing or disputed.
Review the constitution, director arrangements and access to company records with a lawyer where necessary. Request the information needed for your role and retain the response.
Keep accurate minutes or contemporaneous notes of concerns raised and decisions made. Do not manufacture a retrospective record or describe a disagreement as a resolution the board never passed.
ASIC explains directors’ duties to remain informed and respond to financial difficulty. Ask a suitably qualified adviser what you should do in the company’s actual circumstances, including the governance impasse.
Clarify who the adviser represents. Advice to the company may not answer every question about an individual director’s position or conflicts between directors.
Agree actions, responsibility and review dates where a decision can be reached. If the refusal continues, return to your adviser with the evidence and ask about the available steps.
Do not assume that sending one warning email, resigning or leaving the other director in charge automatically resolves your responsibilities. The appropriate response depends on the facts and timing.
