Disqualified person not to manage corporations

Offence title:

Disqualified person not to manage corporations

Act:

206A Corporations Act

Offence:

(1)   A person who is disqualified from managing a corporation commits an offence, if they:

(a)   They make or take part in decision making affecting the whole, or substantial part of the business of the corporation; or

(b)   Do anything to affect the corporation’s financial standing; or

(c)    Communicate instructions or wishes (which go beyond professional advice that may be appropriate) in circumstances where they know:

                                           i.         The directors are accustomed to acting on the wishes or instructions; or

                                         ii.         Intending the directors act on the wishes or instructions.

Penalty:

5 years imprisonment.

Summary/Indictable/mixed:

Mixed

Jurisdiction:

Local, District or Supreme Court

How committed:

The long-term chairman, who is disqualified, continues to exert influence over the existing directors by making statements that are couched as requests but are intended as directions.

Important note:

Defence: (1B) It is a defence to a contravention of subsection (1) if the person had permission to manage the corporation under either section 206GAB or 206G and their conduct was within the terms of that permission.