There's a gap between a company ceasing to trade and a company being formally deregistered — and directors' duties under the Corporations Act keep applying for the whole of it, not just while the doors were open.
Duties that continue
Directors remain obliged to act in good faith and in the company's best interests, avoid conflicts of interest, and — critically for a winding-down company — avoid allowing the company to trade while insolvent. These duties don't switch off because trading has stopped; they apply to how the company is wound down, not just how it was run.
The insolvent trading duty specifically
If a company stops actively trading but still has debts it can't pay as and when they fall due, directors have a specific duty to prevent the company from incurring further debts in that state. This is exactly the scenario our solvency test is built to help identify — the risk isn't limited to companies that are obviously in trouble; a quietly dormant company with unpaid debts is still trading insolvent in the eyes of the law if it keeps incurring new liabilities.
Record-keeping duties
Directors are required to ensure the company keeps financial records that correctly record and explain its transactions and financial position — this obligation doesn't stop the day trading ends, and the records need to be retained for the period required after the company closes (see our guide on record retention periods).
Duties around the closure decision itself
Passing the directors' and members' resolutions to deregister, confirming the eligibility criteria are genuinely met, and not misrepresenting the company's position to ASIC are themselves duties directors are accountable for — Form 6010 is a legal declaration, not a formality.
This is general information, not legal advice — if there's any doubt about the company's solvency or a director's position, get advice before proceeding with closure.