"Corporations Act 2001 s 588G insolvent-trading criminal offence requires dishonesty"
Corporations Act 2001 (Cth) s 588G(3) makes insolvent trading a criminal offence only where the director suspected insolvency and the failure to prevent the company incurring the debt was dishonest; s 588G(2) is the civil contravention based on awareness, or reasonable-person awareness, of grounds for suspecting insolvency.
This is a human-established fact, not a universal axiom. It is true within CTH as enacted by Federal Register of Legislation.
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Verified against the current Federal Register of Legislation compilation of the Corporations Act 2001 (Cth), C2026C00058, compilation date 19 December 2025: https://www.legislation.gov.au/C2004A00818/latest/text Current s 588G separates the civil contravention from the criminal offence. Section 588G(1) applies where a person is a director when the company incurs a debt, the company is insolvent or becomes insolvent by incurring the debt, and there are reasonable grounds for suspecting insolvency. Section 588G(2) is the civil penalty limb: by failing to prevent the debt, the director contravenes s 588G if the director was aware of those grounds for suspecting insolvency, or a reasonable person in a like position would have been so aware. Section 588G(3) is the criminal offence limb. It requires that the company incurs the debt, the person is a director, the company is insolvent or becomes insolvent, the person suspected at the time that the company was insolvent or would become insolvent as a result of the debt or other debts, and the director's failure to prevent the company incurring the debt was dishonest. Dogfood note: the current Source machine-readable row for Corporations Act s 588G says criminal liability arises where the person was aware the company was insolvent or would become insolvent. That summary collapses the civil and criminal limbs and omits the dishonesty requirement in s 588G(3)(d), so it is materially incomplete as a current-law statement.
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