When assessing insolvency under s 95A of the Corporations Act, the court must consider the realistic likelihood of debts being called in, including whether the major creditor has an interest in the survival of the business that makes it unlikely they would demand repayment. A company may be balance sheet insolvent but cash flow solvent where its principal creditor is also an investor unlikely to call in debts. A person who considers themselves a co-owner of a small company, provides its working capital, attends daily, and participates in management decisions may be a de facto director even without formal appointment and despite denying the title.
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