ASIC Upholds Director Accountability (Jan 25 Protection Update)

Relevant For:

Directors, future directors and business owners seeking to understand ASIC’s oversight.

Key Points:

• ASIC bans repeat offenders for up to five years under section 206F of the Corporations Act.
• Disqualification protects stakeholders and ensures public trust.
• Liquidator reports often trigger director bans.
• Recent cases highlight ASIC’s firm stance on governance failures.
• Directors must prioritise legal compliance, record-keeping and solvency.

Full Article:

Running a company in Australia involves legal and financial duties to creditors, employees and the wider community. When directors fall short of these obligations, the Australian Securities and Investments Commission (ASIC) intervenes. ASIC disqualifies directors who repeatedly mismanage companies, preventing further harm and reinforcing trust in the corporate landscape.

Disqualified Directors

Directors can be banned for up to five years if certain criteria are met, such as involvement in multiple failed companies within seven years or serious misconduct. These measures protect creditors and employees from ongoing mismanagement and deter directors from ignoring crucial responsibilities like lodging tax returns and maintaining proper records.

The Disqualification Process

Before ASIC bans someone, it follows