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If you are the owner or director of a small company, you are required to follow the rules presented in the Corporations Act 2001 (Corporations Act). What are you personally responsible for, according to the law?
As a director, you must:
- Be honest and transparent
- Be aware of what your company is doing
- Be especially careful if your company handles other people’s money
- Ensure that your business can pay its debts on time
- Ensure that your business keeps complete financial records
- Act in the best interests of the company even when this is not in your own interests
If your personal interests conflict with your director duties, it’s your responsibility to disclose these at a directors’ meeting. If you are the only director of a proprietary business, this rule does not apply.
For What work is a director responsible?
You and any other directors control the business of your company. You must be fully aware of what your company is doing, including how a proposed action will affect the business performance of the company. Ask managers and staff questions about how business is going, participate actively in directors’ meetings, and seek professional advice when you need it – for example, from corporate lawyers in Sydney.
Who can be a director or secretary?
You need court consent to be a director or manager of a company if certain conditions apply to you. For example, if you are an undischarged bankrupt, or if you have been convicted of certain offences such as breach of your duties or fraud. If you went to prison for these offences, you may not manage a company until five years after release. Setting up a dummy director while you are managing the company is a serious offence. Each year, reckless and dishonest directors are sent to jail or heavily fined by the courts. Also, directors must be at least 18 years of age.
More on running your business and finding a corporate lawyer in Sydney
There are many things to be aware of when you direct a company to ensure that you are compliant with all applicable laws. For example, you must keep proper financial records, remain compliant with the Corporations Act, ensure that your company pays all its debts when they become due and much more. Keep in mind that your personal assets may be at risk should your company become insolvent.
If you are careful and honest in running the company, understand your legal obligations and comply with them, stay informed about your company’s performance and financial position, give top priority to the interests of the company and its shareholders, and seek professional advice when needed, you are unlikely to get into trouble.
If you do find yourself in need of the services of workplace lawyers in Sydney, Dowson Turco Lawyers can provide the assistance you need. There are many reasons people need workplace lawyers, including taxation issues, various business transactions, intellectual property issues, and more. If you need a corporate lawyer, DTL can provide a knowledgeable, experienced team member who will work with you throughout the legal process to reach the best possible outcome. Do you have questions about corporate law? Contact DTL now for help.