ASIC may disqualify a person from acting as a director or being involved in the management of a company for up to 20 years.
A Director Banning Order can Disqualify you from:
Managing a Corporation
Acting as a Director of a Company
Running a Company for 20 Years
Section 206F of the Corporations Act broadly states that:
ASIC may disqualify a person from managing corporations for up to 5 years, if within 7 years they have been an officer of 2 or more corporations that have been wound up in insolvency and those companies have been unable to return at least 50 cents in the dollar to the ordinary unsecured creditors.
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In determining whether a disqualification is justified, ASIC must have regard as to whether the 2 or more failed corporations were related to one another and also the persons’ conduct, whether the disqualification is in the public interest and any other appropriate matters.
ASIC can apply for court orders disqualifying a person from managing corporations for up to 20 years if they have been an officer of two or more companies that have failed within the last 7 years, and the way in which the companies were managed contributed to the failures.
Section 206D of the Act broadly states that the Court may disqualify a person from managing corporations for up to 20 years, if within 7 years they have been an officer of 2 or more corporations that have been wound up and the person has been wholly or partly responsible for the insolvency of the corporations. An example would be a person’s involvement in phoenix transactions resulting in the stripping or removal of assets from a company.
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