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Being involved on the board or at a managerial position in a company brings with it certain duties and obligations. These duties and obligations are derived from statute, common law and statutory bodies such as Australian Securities and Investments Commission (ASIC) and Australian Competition and Consumer Commission (ACCC). 

The powers of an executive or manager are also usually defined by contract and agreement and include powers, duties, obligations and the ability to bind the company as an agent.  Directors are fiduciaries that exercise managerial duties, which include the duty to act bona fide in the best interest of the company as a whole, to act for a proper purpose, to avoid conflicts of interest and to exercise due care and diligence.  There may be harsh, severe penalties for breach of these duties.  Our team of highly skilled Private Client Solicitors may be able to assist you in protecting your rights and advising you appropriately so that you may properly discharge your obligations as an executive or manager.

Furthermore, as an executive or manager you have duties to creditors that need to be fulfilled. Although a corporate entity has limited liability, there is ample authority that enunciates that directors must take into account the interests of creditors as a whole.  It is also an offence to trade whilst insolvent and a breach of directors’ duties in doing so.  Recent updates in the law mean that creditors and/or shareholders have increased recourse against directors who disregard their creditors and breach their duties in this regard.  Proper legal advice from a Private Client Lawyer may be required to ensure that you are fulfilling your duties in a manner which is compliant with all your obligations under the law.

There are various disclosure requirements in terms of meetings, reporting of financial performance and of director’s interests and benefits conferred to related parties. Any resolutions need to be appropriately documented and reported to the required parties, which for public companies may mean the general public.  In terms of reporting, the types of reports that might be required include annual reports, director’s reports and declarations, as well as financial information disclosure.  Consultation with an experienced Private Client Lawyer may provide great assistance in these matters.

There are various civil penalties as well as criminal penalties for breaches of some of the Director Duties.  The penalties may include investigations by ASIC, as well as statutory remedies instigated by members.  It is important that proper legal advice be obtained from a Private Client lawyer, to ensure compliance with the relevant laws, as well as to avoid fines, penalties and other retribution.

If you need further legal advice on your matter, you may book an appointment with us by calling 02 9233 4048 or by sending an email to info@navado.com.au. 

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This webpage (and any material or wording appearing on this webpage) is provided for general information purposes only and does not constitute any Tax or Accounting Advice. It does not take into account your objectives, financial situation or needs or your instructions or all of the relevant facts and/or circumstances. Navado accepts no responsibility to any person who relies on the information provided on this website. We further refer you to our Disclaimer.

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