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ARTICLE · 26 FEBRUARY 2016

How to avoid disqualification as a director by ASIC

Holding Redlich
Holding Redlich
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ASIC has the power to disqualify a person from managing a corporation for up to 5 years in certain circumstances.

AustraliaCorporate/Commercial Law
Howard Rapke
Howard Rapke
Greg Wrobel
Greg Wrobel
Paul Venus
Paul Venus
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The principle that underpins the concept of a limited liability company is that companies can fail. Entrepreneurialism is encouraged by this principle because it encourages risk taking. Directors can make decisions with the knowledge that, by taking a risk in running a limited liability company, they will be protected from losing their personal assets. Company failure will not result in personal ruin and so you would expect directors to act accordingly 1.

But this limit on liability does not give directors of a limited liability company carte blanche to act irresponsibly in making decisions that affect the company and those it deals with. With the protections of limited liability comes the responsibility to ensure that the company is well managed and that the law is upheld. Directors must take their duties very seriously if they are to enjoy the benefits of being a director.

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