If you are a director embarking on a new business venture, you are responsible for a number of obligations. One of these obligations is actually understanding the responsibilities of being a company director. This includes the factors that may cause you to get banned from acting as a director for a certain period of time.
There are two main reasons that may cause ASIC to ban you.
1) ASIC Disqualification
According to the Corporations Act (Section 206F), ASIC can disqualify someone from managing a corporation for up to 5 years if they have been an officer of two or more companies that have entered liquidation within the last 7 years. This is part of a broader issue known as phoenixing.
However, ASIC is required to consider the following factors before determining whether or not it should ban someone from acting as a company director. This includes any relationship between any of the companies, making a judgement regarding the person’s conduct in relation to the management of the company; and deciding whether or not the disqualification would be in the public interest.
If you are a company director who has declared bankruptcy, then you cannot act as a director of any company whilst you are bankrupt. It is worth noting that a typical Bankruptcy period lasts for three years.
We understand that being a company director can be overwhelming. This is why we pledge to make the insolvency process as easy as possible for you. We will keep you informed at all times. We want to help you every step of the way, and that is why we offer free, 24/7 advice on our insolvency hotline. Call now on 1800 210 073.