Safe Harbour: Guide your business to financial recovery

As a director facing financial uncertainty, you need trusted guidance to protect both your business and yourself. Our safe harbour advisory service helps you take early action when you suspect your company may become insolvent. We’ll work alongside you to assess your eligibility and develop an effective restructuring strategy, offering a path to business recovery and sustainable growth

What is Safe Harbour?

Safe harbour is a legal protection that shields company directors from personal liability for insolvent trading. Introduced in 2017, it encourages directors to take proactive steps towards restructuring rather than rushing into voluntary administration or liquidation.

This protection gives you breathing space to explore recovery options while continuing to trade. You can work on turning your business around without facing personal liability for debts incurred during the restructuring period, provided you meet specific requirements and act in good faith.

What are the advantages and features of Safe Harbour?

Our tailored approach to safe harbour protection offers several key benefits:

Legal protection

Shield yourself from personal liability for insolvent trading while implementing your business recovery strategy.

Maintain control

Keep directing your company throughout the restructuring process, using your industry expertise to guide recovery efforts.

Flexible solutions

Shape your approach to match your specific circumstances, with freedom to adjust strategies as needed for optimal outcomes

Recovery time

Gain valuable space to develop and execute effective restructuring plans without immediate pressure to enter administration or liquidation.

Safe harbour requirements for directors

To qualify for safe harbour protection, you must meet the following requirements:

Your responsibilities as company director
  • Obtain advice from qualified professionals as soon as possible
  • Begin developing recovery plans as soon as you suspect insolvency
  • Keep yourself informed of your company’s financial position
  • Ensure appropriate financial records are maintained
Your company obligations
  • Pay all employee entitlements when due, including wages and superannuation
  • Stay up-to-date with the company’s ATO tax obligations
  • Maintain proper books and records

If you’re not eligible, alternative options include:

Informal Workouts


Create private, flexible restructuring arrangements with your creditors without Court involvement. This approach lets you address financial challenges through voluntary agreements while maintaining confidentiality and control.

Deed of Company Arrangement (DOCA)

Protect yourself from personal liability while working with creditors to create a formal arrangement. This structured plan helps improve business performance through agreed debt arrangements and operational changes.

Small Business Restructuring (SBR)

For viable businesses with debts under $1 million, this streamlined option lets you keep trading while restructuring debts. Work with a specialist advisor to develop and implement a plan for sustainable recovery.


Voluntary 
Administration (VA)

Get breathing space to properly assess your business viability and explore recover options. Our independent administrator works with all stakeholders to determine the best path forward while protecting your business from creditor actions.

Regain control with Australia’s trusted Safe Harbour specialists

Facing financial distress? Our Safe Harbour experts help directors restructure, regain stability, and move forward with confidence – without the immediate risk of insolvency.

Director-focused expertise

Our team brings firsthand business ownership experience, understanding both the financial and personal challenges directors face during restructuring.

Tailored guidance

We provide clear, effective solutions that match your specific situation, helping you navigate safe harbour requirements while working towards recovery.

Complete support network

Through our partnership with Beyond Blue, we deliver both professional expertise and emotional support during this challenging period. You’re not alone in this journey.

Why directors need expert safe harbour support

Current market conditions have created unprecedented challenges for company directors. These statistics highlight why early intervention is crucial. With proper guidance, safe harbour protection can help you navigate these challenges while working towards recovery.

55%
of SMBs have considered closure in the past 12 months
55%
experience cash and liquidity challenges
25%
face cashflow difficulties

Your step-by-step guide to the Safe Harbour process

We understand every business faces unique challenges. Our team guides you through each stage of safe harbour, providing expert and clear communication throughout your journey.

Step 1: Assessment and eligibility

We begin with a confidential discussion about your business’s financial situation. During this crucial step, we’ll review your company’s current position and verify compliance with employee entitlements and tax obligations. This allows us to determine your eligibility for safe harbour protection and identify potential courses of action that could lead to better outcomes for your business.

Step 2: Strategy development

Working closely with you as director, we’ll develop a comprehensive restructuring plan that gives your business the best chances of recovery. This involves creating detailed financial forecasts and establishing clear guidelines for tracking progress. We’ll outline how to manage key stakeholders through the process and document our approach to demonstrate compliance with safe harbour requirements.

Step 3: Implementation and ongoing review

Our support continues as you put the plan into action. We’ll help you implement agreed strategies while continuously monitoring progress against key milestones. As circumstances change, we’ll adjust the plan to maintain momentum towards recovery. Throughout this phase, we maintain thorough documentation and ensure ongoing compliance, providing regular guidance and updates to keep you informed and confident about the path forward.

Is Safe Harbour protection right for you as director?

Consider safe harbour protection if you:

  • Notice early warning signs of financial distress
  • Need time to develop a structured turnaround plan
  • Seek protection from personal liability during restructuring.

We’ll help assess your situation and explore whether safe harbour offers the best path forward. While it provides valuable protection, it requires careful consideration and expert guidance to implement effectively.

What is a Director Penalty Notice (DPN)?

A DPN is a formal notice issued by the ATO, holding  directors personally liable for unpaid company tax obligations. These obligations may include:

A DPN is a formal notice issued by the ATO, holding  directors personally liable for unpaid company tax obligations. These obligations may include:

  • Pay As You Go (PAYG) Withholding

  • Superannuation Guarantee Charge (SGC)

  • Goods and Services Tax (GST)

The DPN outlines the unpaid debt and  actions required to avoid personal liability.

Types of DPNs: Which have you received?

The ATO issues two types of DPNs, each with specific implications:

21-day DPN (Traditional or Non-lockdown DPN)

Issued when tax debts are overdue but have been reported to the ATO within three months of the due date.

Directors have 21 days to act, with options such as:

  • Paying the debt in full.

  • Placing the company into liquidation or Voluntary Administration (VA).

  • Appointing a Small Business Restructuring Practitioner (SBRP), if total debts are under $1 million.

Directors have 21 days to act, with options such as:

Lockdown DPN

  • Issued when tax debts remain unreported or unpaid for over three months past the due date.

  • Directors are immediately personally liable for the debt, with no option to appoint administrators or liquidators to avoid liability.

Key Difference

A 21-day DPN provides time to act, while a Lockdown DPN imposes immediate personal liability.

No items found.

Step 01

Step 02

No items found.

As a former director, can you be affected by a wind-up notice?

Even after stepping down as a director, you’re not automatically free from garnishee notice implications. The ATO can still hold you responsible for:

  • PAYG withholding
  • Superannuation Guarantee Charge
  • Net GST liabilities

These responsibilities cover reporting periods that begun during your directorship.

If you learn of a garnishee notice affecting a company where you were previously a director, seek immediate advice to understand your position.

What are the advantages and features of Safe Harbour?

Our tailored approach to safe harbour protection offers several key benefits:

Legal protection

Shield yourself from personal liability for insolvent trading while implementing your business recovery strategy.

Maintain control

Keep directing your company throughout the restructuring process, using your industry expertise to guide recovery efforts.

Flexible solutions

Shape your approach to match your specific circumstances, with freedom to adjust strategies as needed for optimal outcomes

Recovery time

Gain valuable space to develop and execute effective restructuring plans without immediate pressure to enter administration or liquidation.

FAQs

Find answers to common questions about Safe Harbour.

Who can enter safe harbour?

Safe harbour protection applies to individual company directors, not the company itself. You’ll need to meet specific requirements and actively work towards business recovery to maintain this protection.

Does safe harbour protect against all liabilities?

No. Safe harbour only protects against civil liability for insolvent trading. As a director, you must still meet all other legal requirements and duties. We’ll help you understand exactly what protection safe harbour offers in your situation.

Is safe harbour a formal insolvency process?

No. Unlike voluntary administration or liquidation, entering safe harbour isn’t a formal insolvency process. It’s a protection that lets you work on restructuring your business while continuing to trade.

When should company directors consider safe harbour?

Seek advice about safe harbour as soon as you suspect your company may be approaching insolvency. Early action gives you more options and a better chance of successful restructuring.

Who can act as a safe harbour advisor?

While Australian law doesn’t specify exact qualifications for safe harbour advisors, they should have appropriate expertise to advise on your company’s financial situation. Our team brings both technical knowledge and practical business experience to guide you through this process.

Still have questions?

Get in touch for more information.

Join us on the journey to resilience

At AVA Advisory, we believe that every business deserves the chance to not just survive but thrive. Our team is here to provide the expert guidance, personalised solutions, and empathetic support you need to overcome financial challenges and achieve long-term success. Whether you’re facing insolvency, struggling with debt, or looking for ways to improve your financial management, we’re here to help.

Say hello

Reach out to our friendly team for an obligation-free, cost-free consultation. Share details of your situation and concerns in confidence. Clarity, relief, and a brighter future for you and your business are only a few steps away.

Thank you! We have received your message and will be in touch within the next 24-48hours.
Oops! Something went wrong while submitting the form.