(a) **Controlling Act:** **Corporations Act 2001 (Cth)**

(b) **Directors’ duties provisions engaged:**

- **s 180(1) — care and diligence:** a reasonable director must monitor the company’s financial position and avoid exposing it to foreseeable loss by hopeless trading.
- **s 181(1) — good faith, best interests, proper purpose:** diverting a profitable customer contract to a separate company the director owns is inconsistent with acting in the company’s best interests.
- **s 182(1) — improper use of position:** using the office of director to secure an advantage for the director’s own company, or to prejudice the company, is prohibited.

(c) **Insolvent trading provision engaged:**

- **s 588G(2) — insolvent trading:** a director must prevent the company incurring debts while insolvent (or becoming insolvent by incurring them). Continuing to order stock on credit after the company cannot pay its debts as they fall due, with no realistic funding and a warning of insolvency, engages insolvent trading liability.