Corporate offences

A range of offences for directors and other office holders within a company can attract criminal and civil liability, including:

  • acting recklessly or with intentional dishonesty and failing to fulfil your duties to the corporation
  • using your position or information dishonestly (or recklessly) with the intention to gain an advantage for yourself or someone else or to cause a detriment to the corporation
  • insolvent trading
  • illegal phoenix activity
  • outstanding tax obligations
  • debts incurred by companies acting as trustees.

Penalties

In the most serious cases, the maximum penalty is 10 years of imprisonment and/or the larger of:

  • 4,500 penalty units
  • three times the ‘benefit gained’ or ‘loss avoided’ because of the offence.

Other consequences of breaching directors' duties may include:

  • personal liability to compensate the company for losses caused by the breach
  • personal liability to compensate shareholders, creditors or other third parties for losses caused by the breach
  • removal from office
  • banning orders preventing the office holder from managing other companies.

For further information, see ASIC or the Commonwealth Director of Public Prosecutions.

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