Blog Layout

ASIC Provides Guidance for Small Business Directors
Liz Gibbs • September 18, 2017

As a director of a small business , you need to ensure you are aware of what is expected of you – your duties and obligations – in your role as a director. The Australian Securities and Investments Commission (ASIC) has issued a guide that provides an overview of the responsibilities involved in being a director of a small business, and sets out the regulator's expectations of people who take on  this role.

Small business owners  need to understand what being a director of a small business company entails. To help small businesses, the Australian Securities and Investments Commission (ASIC) has developed a guide setting out the role and responsibilities of company directors. The guide is particularly useful for small businesses seeking to change from a sole trader to a company business structure. http://www.checkpointmarketing.net/img/Australia/HR%20and%20Management/LORES__HR_SmallBusinessDirectorsGuide__CS.jpg

The guide, entitled  ASIC's guide for small business directors , provides an overview of directors' duties under the  Corporations Act 2001  and covers the following topics:

  • what it means to be a company director;
  • how to become a company director;
  • directors' key responsibilities;
  • directors' liabilities when things go wrong; and
  • how to resign as a director.

Key points from the guide

  • A director of a company is a person who is responsible for managing the company's business activities.  Even small companies must have at least one director. Larger companies may have many directors who collectively manage the business of the company. They are often referred to as a "board of directors".
  • Shadow directors can still be liable for breaches of the laws relating to directors' duties, even though they were never formally appointed as a director of the company Under some circumstances even if you are not formally appointed as a director, you may still be subject to the same duties and liabilities as a director. If you act as a director or give instructions to the appointed directors on how they should act, you may be considered a "shadow director".
  • As a director, you are responsible for the management of the affairs of the company.  You must comply with your legal obligations as a director under the  Corporations Act 2001. This is the case even if you appoint an agent to look after your company's affairs.
  • Under some circumstances, directors who breach the law can become personally liable for the company's debts and/or be the subject of other regulatory action taken against them.  Once a company is registered, its separate legal status, property, rights and liabilities continue until ASIC deregisters the company. Your obligations as a director may continue even after the company has ceased trading and has been deregistered. Under certain circumstances, as a director you may be personally liable for the company's debts and other losses.
  • Before becoming a director, you should fully understand your role and legal obligations regarding the management of the company .If you are already a director, or are about to become a director, of a company that has employees, you should immediately find out if the company has any pay as you go (PAYG) withholding or superannuation guarantee charge (SGC) amounts owing to the ATO. If the company fails to meet a PAYG withholding requirement or an SGC liability by the due date, under the ATO's director penalty regime you may become personally liable for a penalty equal to the unpaid amount.

ASIC's guide for small business directors  is available online at   ASIC's Guide for Small Business  

Need to know more?

If you would like to know more,  please don't hesitate to contact Robert Goodman Accountants on 07 3289 1700.

 © Copyright 2017. All rights reserved.

Brought to you by: Robert Goodman Accountants

Office open
By Liz Gibbs March 10, 2025
With thanks to all Energex and Emergency services Crew, our electricity has been reconnected and our office is open from today 11 March. We hope you and your loved ones are safe and well following cyclone Alfred. These past few days have been challenging for many, and our thoughts are with everyone affected.
By Liz Gibbs March 10, 2025
Due to a power outage affecting the entire Samford area, the RGA Practice will be operating remotely today, 10 March, until electricity is restored. Please be assured that our team remains available and can be reached at 07 3289 1700. We appreciate your understanding and support during this time. Stay safe, and we look forward to seeing you soon.
Cyclone Alfred
By Liz Gibbs March 5, 2025
As Tropical Cyclone Alfred approaches, we want to remind everyone to take necessary precautions and ensure their safety. We have received some important information that we believe is crucial to share with you to help you prepare for the severe weather conditions ahead.
Work Health and Safety (Sexual Harassment) Amendment Regulation 2024
By Liz Gibbs February 26, 2025
In a significant move to combat workplace sexual harassment, Amendments to the Work Health and Safety Regulation 2011 (as per the Work Health and Safety (Sexual Harassment) Amendment Regulation 2024) will soon commence on 1 March 2025.
By Liz Gibbs February 25, 2025
The amount of money that can be transferred to a tax-free retirement account will increase to $2m on 1 July 2025.
What happens to your super when you die?
By Liz Gibbs February 25, 2025
The Government has announced its intention to introduce mandatory standards for large superannuation funds to, amongst other things, deliver timely and compassionate handling of death benefits. Do we have a problem with paying out super when a member dies?
By Liz Gibbs February 25, 2025
If credit card surcharges are banned in other countries, why not Australia? We look at the surcharge debate and the payment system complexity that has brought us to this point. In the United Kingdom, consumer credit and debit card surcharges have been banned since 2018. In Europe, all except American Express and Diners Club consumer surcharges are banned. And in Australia, there is a push to follow suit. But, is the issue as simple as it seems?
Babyboomer wealth
By Liz Gibbs February 25, 2025
“Succession planning, and the tax risks associated with it, is our number one focus in 2025. In recent years we’ve observed an increase in reorganisations that appear to be connected to succession planning.” ATO Private Wealth Deputy Commissioner Louise Clarke.
Penalty for False R&D claims
By Liz Gibbs February 25, 2025
A joint investigation involving the ATO found that, between 2014 and 2017, a Sydney business coach promoted unlawful tax schemes encouraging clients to lodge over-inflated, inaccurate or unsubstantiated research and development ('R&D') tax incentive claims
SMSF lodgement due dates
By Liz Gibbs February 25, 2025
All trustees of SMSFs with assets (including super contributions or any other investments) as at 30 June 2024 need to lodge an SMSF annual return ('SAR') for the 2023/24 financial year.
More Posts
Share by: