ABSTRACT
The purpose of this paper is to provide an outline of the development of the law with respect to insolvent trading, in particular the prohibition upon directors allowing companies to trade while insolvent. It is important to consider the historical context because the development of the law provides an opportunity to understand the reasons for the introduction of insolvent trading provisions and the reasons for the subsequent amendment of those provisions. This allows an insight into the operation of the current law of insolvent trading in Australia. The historical context also creates a base against which to critique the current insolvent trading provisions, so as to examine the efficacy of such provisions, and acts as important background information that will facilitate suggestions for further reform in the area.
