LAW-0003 · deepseek-v4-flash (default)
(a) **Controlling Act**: Corporations Act 2001 (Cth).

(b) **Directors' duties provisions engaged**:
- **s 180 – Duty of care and diligence**: Requires directors to exercise the degree of care and diligence that a reasonable person would in their position. The director's continued trading while insolvent and ignoring warnings likely breaches this duty.
- **s 181 – Duty to act in good faith in the best interests of the company and for a proper purpose**: The director must act honestly and in the company's interests, not for personal gain. Diverting a customer contract to a personally owned company is a breach.
- **s 182 – Duty not to improperly use position**: The director used their position to gain an advantage for another entity (the separate company) at the expense of the company.
- **s 183 – Duty not to improperly use information**: If the director used confidential company information (e.g., customer details) to divert the contract, this duty is also breached.

(c) **Insolvent trading provision engaged**:
- **s 588G – Duty to prevent insolvent trading**: The director must prevent the company from incurring a debt when it is insolvent or would become insolvent. The director allowed the company to order stock on credit despite knowing of its inability to pay debts, triggering personal liability.