Section 89 - Liability of directors of private company.

Director liability for unrecoverable private company GST arises unless non-recovery stems from lack of gross neglect or misfeasance.

If tax, interest or penalty due from a private company cannot be recovered, every person who was a director during that period is jointly and severally liable for payment unless he proves non-recovery cannot be attributed to his gross neglect, misfeasance or breach of duty. On conversion to a public company, that primary liability does not apply to amounts relating to the private period if not recovered before conversion, though personal penalties on directors remain unaffected.