Director liability: directors of private companies may be jointly and severally liable for unpaid GST unless they prove no gross neglect.

Section 89 makes every person who was a director of a private company jointly and severally liable for unpaid tax, interest or penalty where such amounts cannot be recovered, subject to the director proving non-recovery cannot be attributed to any gross neglect, misfeasance or breach of duty. If the private company converts into a public company and prior-period amounts remain unrecovered at conversion, the joint and several liability provision does not apply to directors for those amounts, except that any personal penalty on a director remains enforceable.

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