Business Law

Financial distress does not necessarily mean a business is insolvent. However, when cash-flow tightens, debts mount or creditors lose patience, delaying action can narrow the options that remain. Those pressures are real. Alares Credit Risk Insights[1]  reported that Australian insolvencies in August 2026 exceeded the corresponding level in 2025, while winding-up applications reached a new monthly high. In addition, more than 37,000 businesses were subject to Australian Taxation Office (ATO) tax debt reporting. Gold Coast company directors and business owners under financial pressure should understand the warning signs, their legal obligations and the options available before the position deteriorates further. Speaking with an insolvency lawyer early can also help clarify the legal implications of those options. What does it mean when a business is in financial distress Warning signs can include: The critical question is whether the company has crossed into insolvency. Under section 95Aof the Corporations Act 2001 (Cth), a company is solvent if it can pay all its debts as andwhen they become due and payable. The test therefore focuses on the company’s ability topay its debts on time, rather than simply whether its assets exceed its liabilities. What should you do when your business is in financialdistress? 1. Review your financial position The Australian Securities and Investments Commission (ASIC) recommends acting straightaway when a business is facing financial trouble. Bring your financial records up to date and review debts, cash-flow and money owed to thebusiness. This can help establish whether the business faces a temporary cash-flowproblem or deeper concerns about its ability to pay debts when they fall due.Business lawyers can provide legal advice where those financial concerns also raisequestions about directors’ duties, creditor action or insolvency. 2. Understand your duties as a director ASIC says directors must comply with their legal obligations when a company is in financialtrouble, including preventing insolvent trading. Under section 588G of the Corporations Act,directors have a duty to prevent a company from incurring debts where it is insolvent, orwould become insolvent by incurring them, in circumstances where there are reasonablegrounds for suspecting insolvency. A liquidator may pursue a director personally for compensation for loss or damage resultingfrom insolvent trading. An insolvency lawyer can advise a director on their legal positionwhen insolvency is suspected. 3. Don’t ignore tax debt The ATO can disclose eligible business tax debts to credit reporting bureaus where, amongother requirements, at least $100,000 is overdue by more than 90 days and the business isnot effectively engaging with the ATO. A notice of intent generally gives the business 28days to act. Directors may also face personal exposure through director penalty notices for unpaid PAYGwithholding, GST and super guarantee charge. A Gold Coast business lawyer can adviselocal directors on the legal implications of tax debt and director penalty notices. What happens if a creditor serves a statutory demand? If debts remain unresolved, creditor enforcement can escalate quickly. One of the more serious steps a company may face is a statutory demand. A creditor owed at least $4,000 can serve a statutory demand under section 459E of the Corporations Act. A company generally has 21 days to comply or apply to have the demand set aside. For a set-aside application, the application and supporting affidavit must be filed, and copies served on the creditor, within that 21-day period. Failure to comply can create a rebuttable presumption of insolvency supporting a winding-up application. The 21-day period for making a valid set-aside application is strict, making immediate advice from an insolvency lawyer important. Can a financially distressed business keep trading? Financial distress does not automatically mean a business must close. Depending on the circumstances, there may be options that allow the company to continue trading while directors work to improve its financial position. Safe harbour can provide directors with protection from civil liability for insolvent trading for debts incurred directly or indirectly in connection with a qualifying course of action that is reasonably likely to lead to a better outcome for the company, provided the statutory requirements are met. Businesses may also be able to negotiate payment arrangements with creditors before formal insolvency proceedings become necessary. Business lawyers can assist with the legal aspects of creditor negotiations where appropriate. If creditor negotiations and a viable turnaround strategy are not enough, directors may need to consider formal restructuring or insolvency processes. What formal restructuring and insolvency options are available Eligible companies may consider small business restructuring. This allows directors toremain in control while working with a registered restructuring practitioner on a plan fordealing with creditors. Total liabilities must not exceed $1 million, among other eligibilityrequirements. Other options include voluntary administration, where an administrator takes control of thecompany and assesses its financial position and future. Liquidation involves a liquidatortaking control of the company, realising its assets and distributing available funds tocreditors. The appropriate option depends on the company’s assets, liabilities, cash-flow andprospects of recovery. An insolvency lawyer can help directors understand the legalimplications of the available pathways.For Gold Coast businesses operating in the building and construction industry, the choice ofinsolvency pathway can also have licensing consequences. What does insolvency mean for a Gold Coast building licence? Construction generates 22.2% of Gold Coast output compared with 14.1% acrossQueensland, according to economy.id, making the consequences of insolvency particularlyrelevant to local building businesses. CHART 1: Construction as a share of economic output Region Construction share of output Gold Coast 22.2% Queensland 14.1% Source: economy.id, 2023/24. Under Queensland law, a director involved in certain insolvency events can become anexcluded individual and be unable to hold a QBCC licence for three years. Two separaterelevant insolvency events may result in permanent exclusion. Small business restructuring does not itself involve appointing an administrator or liquidator,although a licensed company must still satisfy the QBCC’s minimum financial requirements.A Gold Coast business lawyer can advise on the legal considerations surrounding financialdistress alongside the specific QBCC requirements that may apply. Where can Gold Coast businesses get help? Eligible Queensland small businesses experiencing or at risk of financial hardship canaccess free financial counselling, including debt support

Estate planning involves more than deciding who inherits what when you die. It can also mean protecting family and business interests, planning for incapacity and ensuring different assets and structures are dealt with appropriately. A will is an important part of this process, but it may not cover every asset or circumstance. This is where a wills and estates lawyer can help. QBM Lawyers works with individuals, families and business owners across the Gold Coast to develop a coordinated estate plan – one that reflects your wishes and is in line with Queensland law. 1. Create a valid will A will is the foundation of your estate plan. It identifies your beneficiaries, appoints an executor to administer your estate, and sets out how your assets should be distributed. If you die without a will (known as dying intestate), your estate will be distributed according to Queensland’s intestacy provisions under the Succession Act 1981 (Qld). This statutory formula may not reflect your wishes, particularly if you have a blended family, are in a de facto relationship, or own a business with more complex asset structures. It’s worth reviewing your will after significant life events. Marriage generally revokes an existing will unless an exception applies, while divorce can revoke provisions relating to a former spouse. Having children, losing a beneficiary or executor, or acquiring or disposing of significant assets may also mean your will no longer reflects your current circumstances.. For couples, mutual wills may be worth considering. Mutual wills involve a binding agreement about how certain property will ultimately be distributed, often including an agreement not to change the agreed arrangements after the first person dies. They can be useful in circumstances such as blended families, where both parties want greater certainty about how assets will eventually pass to their children. However, mutual wills can significantly limit flexibility and do not prevent family provision claims, so it is important to discuss whether they are appropriate with an estate lawyer. 2. Consider a testamentary trust and statement of wishes A testamentary trust is created under your will and comes into effect after your death. Rather than passing directly to a beneficiary, assets can be held and managed within the trust. This may be useful where beneficiaries are minor children, face financial or relationship risks, or where greater control over the management and distribution of an inheritance is desirable. A statement of wishes is a separate, usually non-binding document that sits alongside your will. It helps explain your intentions and gives additional guidance to an executor or trustee on matters such as how you would like a testamentary trust to be managed or your wishes regarding the care of minor children. 3. Plan for assets outside your will A complete estate plan needs to look beyond the assets dealt with directly by your will. Some assets, such as certain jointly owned property and assets held in a trust, may not form part of your estate. Others, including business interests, may form part of your estate but still require separate succession planning. Superannuation is also subject to its own rules about who can receive a death benefit. Superannuation Recent Super Consumers Australia research found that just 13% of people surveyed said they had made a binding death benefit nomination. The organisation estimates that at least 15.5 million Australians may not have one in place, meaning their super fund trustee may retain discretion over who receives their benefit if no other binding arrangement applies. Your super death benefit does not automatically form part of your estate or get distributed according to your will. Without a binding death benefit nomination, the trustee of your super fund generally has discretion to decide who receives your benefit, depending on the fund and its rules. A binding nomination directs the trustee to pay your death benefit to an eligible dependant or your legal personal representative, provided the nomination is valid and in effect. Some binding nominations lapse after a specified period, while others may be non-lapsing. Trusts Assets held by a family or discretionary trust are generally owned by the trustee rather than by you personally, so they cannot be distributed through your will. Succession will instead depend on the trust deed, including how it deals with the appointor or principal – the person who typically has the power to appoint or remove the trustee. Business interests For business owners, a buy and sell arrangement can set out what happens to your interest in the business if you die or become incapacitated. These arrangements, often supported by insurance, can provide certainty for surviving owners and your family, while helping to avoid disputes over valuation or ownership. Because estate planning often intersects with tax, superannuation, trust structures and business succession, an experienced estate lawyer can work alongside your accountant or financial adviser to help ensure your plan is properly coordinated. 4. Planning for incapacity, not just death Estate planning isn’t only about what happens after you die. It also covers who can make decisions for you if you lose the capacity to make them yourself, whether due to illness, injury or age. An enduring power of attorney, made under Queensland’s Powers of Attorney Act 1998, allows you to appoint someone you trust to make financial and/or personal matters, including health decisions, on your behalf. For personal and health matters, your attorney can only act when you do not have capacity to make the relevant decision yourself. For financial matters, you can choose when their authority begins, including immediately, from a specified time or when you lose capacity. Unlike a general power of attorney, an enduring power of attorney can continue to operate if you lose capacity. An advance health directive allows you to give directions about future health care, including certain end-of-life and life-sustaining treatment decisions, if you’re unable to make or communicate those decisions yourself. How to reduce the risk of an estate dispute Even a carefully prepared will can be challenged. Under Queensland law, a family provision

A party in a Queensland Supreme Court lease dispute tried to use ChatGPT’s answer to“What is the ordinary meaning of the phrase ‘medical centre’?” as evidence. The Courtrejected it outright.It’s a small case, but it highlights a much bigger trend. AI tools are now a normal part of howGold Coast business owners research problems, draft documents and prepare for disputes,and this decision is one of the clearest signals yet from a Queensland court about where thatcan be useful and where it isn’t. What happened in the case? The dispute in Inspired Medical Pty Ltd v S Mohindra Pty Ltd [2026] QSC 78 centred on aregistered lease and what the term “medical centre” actually meant under it. Inspired Medicaltried to support its position by putting before the Court answers generated by ChatGPT inresponse to questions, including what the phrase ordinarily means.The judge rejected this evidence entirely, noting that “medical centre” has no fixed technicalmeaning and is open to different interpretations depending on context, so an AI-generatedanswer wasn’t any more helpful than pulling a definition from a dictionary, a method courtshave long treated with caution for exactly this kind of composite phrase.More importantly, the Court was concerned that the accuracy of an AI-generated answerwas unknown and that, without checking the sources behind it, the answer could beunreliable. Ultimately, interpreting the lease was a task for the Court, applying establishedprinciples of contract law. Why does this case matter for Gold Coast business owners? This isn’t an isolated warning. Queensland’s courts have been building formal guidance ongenerative AI for a while. The Supreme Court’s Practice Direction Number 5 of 2025requires accuracy checks on references used in submissions, and Queensland Courts havepublished separate guidelines for both judicial officers and non-lawyers on responsible AIuse. The Queensland Civil and Administrative Tribunal (QCAT) has issued similar guidanceafter several matters involving fabricated case citations or “hallucinated” legal references.The message across the guidance is consistent: using AI does not remove responsibility forwhat is put before a court or tribunal. References to cases, legislation and other authoritiesmust be checked, while factual evidence and legal arguments still need to satisfy theordinary rules that govern court proceedings.In a matter of Reece Hoverd v. M & JD Pty Ltd [2026] FWC 1013 we acted for the employerin submissions successfully making a jurisdictional objection to a general protections claimwhere the applicant’s inappropriate reliance on AI led to his arguments relying on terms ofthe contract and provisions of the award that did not exist. As a result, the Commissioninvited a costs application to be made against the applicant. Where does AI actually help, and where does it create risk? For Gold Coast business owners handling contracts, leases and the occasional dispute, thepractical question isn’t “should I use AI” but “for what”. Here’s a rough guide: Where AI tools can help Where AI tools create risk The common thread is that AI can be useful for preliminary work, but its output should not beassumed to be accurate simply because it sounds confident and authoritative. What should Gold Coast businesses do differently? If you’re negotiating a commercial lease, reviewing a contract or heading into any kind ofdispute, treat an AI tool the way you’d treat a well-read but unqualified friend. It’s fine for afirst impression, but it is not a substitute for a Gold Coast business lawyer who can be heldto their advice.A commercial lawyer Gold Coast businesses actually rely on will tell you the same thing thisjudgment does: the wording of your specific contract, read in its specific context, is what acourt will look at, not a general answer pulled from the internet.A few common scenarios show why:If you’re a tenant or landlord and a lease term is genuinely ambiguous, that’s a job for a GoldCoast property lawyer or property litigation lawyer, not a chatbot. A court decides themeaning by weighing the specific wording, context and legal principle, exactly the kind ofjudgement this case confirms AI can’t be trusted with.If you’re assigning, exiting or negotiating a lease, commercial lease solicitors can assessthose issues in the context of your specific building, the wording of the particular clause andthe way courts have interpreted similar provisions, rather than relying on a general AI-generated response.If a disagreement is heading towards QCAT or the courts, a civil litigation lawyer needs realevidence and a real legal argument, not something generated by AI that you can’t standbehind or verify if it’s challenged. What happens next? As AI tools get better at sounding confident, Queensland courts are making clear thatconfidence isn’t the same as accuracy. For Gold Coast businesses, the lesson isn’t to avoidAI altogether, it’s to know which jobs it’s actually suited for and to bring in a Gold Coastlawyer before an AI-assisted assumption becomes the basis of a decision you can’t undo.Early advice often provides the clearest path forward. Whether you’re negotiating a lease, reviewing a contract or already in a dispute,contact the team at QBM Lawyers to speak with an experienced commercial lawyer onthe Gold Coast. Frequently Asked Questions Can you use ChatGPT as evidence in court in Queensland? Not on its own. In Inspired Medical Pty Ltd v S Mohindra Pty Ltd [2026] QSC 78, the Supreme Court rejected ChatGPT answers a party tried to rely on to argue what a lease term meant, because there was no way to check whether the answers were accurate. AI- generated material isn’t automatically ruled out, but it can’t be treated as reliable just because an AI tool produced it. Can I use AI tools like ChatGPT for legal research in Australia? Yes, using AI for general legal research is not illegal, and it can be a starting point for background reading or drafting. The risk is relying on it for anything that needs to be accurate and verifiable, such as case citations, legislation or contract interpretation, without checking it against a real source. Can AI make up fake legal cases or citations? Yes. AI tools have been found to generate (“hallucinate”) case citations, legislative references and legal authorities that look genuine but

Unpaid invoices are one of the most persistent headaches for businesses on the Gold Coast. They tie up cash flow and put strain on otherwise healthy operations. A tradie in Southport waiting on a $15,000 invoice feels it just as much as a commercial operator in Robina chasing a six-figure account. Debt recovery lawyers can guide you through the legal process under Queensland law and help recover what your business is owed. Why Gold Coast businesses are chasing more unpaid invoices The Gold Coast’s economy relies heavily on small and medium-sized enterprises across construction, hospitality, retail and professional services. Queensland small businesses posted sales growth of 8.2% year-on-year in the June 2026 quarter, according to Xero Small Business Insights, with construction remaining a consistently solid performer at 10.8% growth nationally. That growth hasn’t necessarily translated into faster payment, though. Australian small businesses waited an average of 22.9 days to be paid after issuing an invoice in the June 2026 quarter, and were paid 6.0 days late on average. With three interest rate rises and elevated fuel prices squeezing margins, even businesses with strong sales can end up carrying the shortfall while they wait to be paid. When a client stalls on payment, or stops paying altogether, the effects show up fast: wages get delayed, supplier accounts fall behind, and the pressure compounds. That’s usually the point where local business owners call a Gold Coast business lawyer to talk through their options. The debt recovery process in Queensland Recovering a business debt in Queensland generally follows a structured path, though every matter is different. Step 1: Letter of demand The first step is usually a formal letter of demand, setting out the amount owed, the reason for the debt and a deadline for payment. This letter can also act as evidence should the matter later proceed to court. A commercial lawyer can help ensure the demand accurately sets out the basis of the debt, the amount outstanding and the action required from the debtor. In some cases, receiving a formal demand is enough to prompt payment or meaningful negotiations. Step 2: Negotiation and payment plans Many debts are resolved before litigation becomes necessary. Negotiating a payment plan or reaching a settlement can save both parties time and money. Debt recovery lawyers often act as an intermediary during this stage, helping to negotiate workable terms while protecting your commercial interests. Step 3: Filing a claim If informal recovery attempts fail, the next step may be to lodge a formal claim. Depending on the amount owed, this could be through the Queensland Civil and Administrative Tribunal (QCAT), the Magistrates Court, or, for larger debts, the District Court or Supreme Court of Queensland. As a general guide, here’s how debt claim values are typically split across the Queensland court and tribunal system: Court or tribunal Approximate claim value QCAT – Minor Civil Dispute involving a fixed or agreed amount Up to $25,000 Magistrates Court of Queensland Up to $150,000 District Court of Queensland $150,001 to $750,000 Supreme Court of Queensland More than $750,000 or complex cases At this stage, it can help to contact lawyers for litigation, as court proceedings involve strict rules around evidence, procedure and timing that are easy to overlook without proper guidance. Step 4: Enforcement Winning a judgment doesn’t always mean the debt is paid. If a judgment debt remains unpaid, enforcement options may include an enforcement hearing, an order for payment by instalments or an enforcement warrant, such as a warrant for seizure and sale or redirection of a debt or earnings. Separate insolvency options may also be available in appropriate cases, including bankruptcy proceedings against an individual debtor or winding-up proceedings against a company. An insolvency lawyer can advise on these further steps where a debtor’s ongoing financial position is in doubt. When do unpaid debts require a civil litigation lawyer? Some unpaid debts aren’t as simple as a missed payment. Disputes may arise over the existence of the debt, the quality of goods or services provided, or an alleged breach of contract. In these situations, businesses often need the support of a civil litigation lawyer to protect their position. Lawyers for litigation can assess how strong your claim is and what it’s likely to cost. From there, they can represent your business through negotiation, mediation or, if needed, a court hearing. How long do you have to recover an unpaid debt in Queensland? Queensland law gives creditors a window, not forever, to act. Under the Limitation of Actions Act 1974 (Qld), a claim for an unpaid debt generally must be commenced within six years from the date the cause of action arose. Determining when that occurred can depend on the terms of the agreement and the circumstances of the debt. Once that period lapses, the debt may become unenforceable through the courts. Different time limits apply once a court judgment has been obtained, so creditors should also avoid unnecessary delay in enforcement Business owners sitting on old invoices should get advice sooner rather than later. A Gold Coast solicitor can confirm where a debt sits against the limitation clock before it becomes a problem. Choosing debt recovery lawyers on the Gold Coast Queensland law, court procedure and local business conditions differ from those in other states, so it helps to work with a Gold Coast solicitor who understands the regional business landscape and is familiar with the local courts and tribunals. The earlier you bring in debt recovery lawyers, the more options you usually have – a payment plan is easier to negotiate on a fresh debt than one that’s been chased informally for two years. Waiting rarely helps. Delay can reduce the practical options available and make recovery more difficult. QBM Lawyers acts for Gold Coast businesses at every stage of debt recovery, from a first letter of demand through to court action. If you’re carrying an unpaid invoice or an overdue account, contact QBM Lawyers to talk through your options. Frequently Asked Questions How