Corporations Act

Question Description

I need an explanation for this Law question to help me study.

“A creditor of a company can be confident that the Corporations Act and case law ensures that a company’s share capital is only available to meet creditors’ interests. Further, under the Corporations Act, if directors lose the company’s capital and the company becomes insolvent, the directors become personally liable.”

Discuss the accuracy of this statement, illustrating your answer with references to the Corporations Act and cases that support and/or contradict it (6 marks).

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