Corporations Act. Australia
of the Criminal Code.
(1B) It is a defence to a contravention of subsection (1) if the person had permission to manage the corporation under either section 206F or 206G and their conduct was within the terms of that permission.
Note: A defendant bears an evidential burden in relation to the matters in subsection (1B), see subsection 13.3(3) of the Criminal Code.
(2) A person ceases to be a director, alternate director or a secretary of a company if:
(a) the person becomes disqualified from managing corporations under this Part; and
(b) they are not given permission to manage the corporation under section 206F or 206G.
Note: If a person ceases to be a director, alternate director or a secretary under subsection (2) the company must notify ASIC (see subsection 205B(5)).
206B Automatic disqualification
Convictions
(1) A person becomes disqualified from managing corporations if the person:
(a) is convicted on indictment of an offence that:
(i) concerns the making, or participation in making, of decisions that affect the whole or a substantial part of the business of the corporation; or
(ii) concerns an act that has the capacity to affect significantly the corporation’s financial standing; or
(b) is convicted of an offence that:
(i) is a contravention of this Act and is punishable by imprisonment for a period greater than 12 months; or
(ii) involves dishonesty and is punishable by imprisonment for at least 3 months; or
(c) is convicted of an offence against the law of a foreign country that is punishable by imprisonment for a period greater than 12 months.
The offences covered by paragraph (a) and subparagraph (b)(ii) include offences against the law of a foreign country.
(2) The period of disqualification under subsection (1) starts on the day the person is convicted and lasts for:
(a) if the person does not serve a term of imprisonment—5 years after the day on which they are convicted; or
(b) if the person serves a term of imprisonment—5 years after the day on which they are released from prison.
Bankruptcy or personal insolvency agreement
(3) A person is disqualified from managing corporations if the person is an undischarged bankrupt under the law of Australia, its external territories or another country.
(4) A person is disqualified from managing corporations if:
(a) the person has executed a personal insolvency agreement under:
(i) Part X of the Bankruptcy Act 1966; or
(ii) a similar law of an external Territory or a foreign country; and
(b) the terms of the agreement have not been fully complied with.
(5) A person is disqualified from managing corporations at a particular time if the person is, at that time, disqualified from managing Aboriginal and Torres Strait Islander corporations under Part 6‑5 of the Corporations (Aboriginal and Torres Strait Islander) Act 2006.
Foreign court orders
(6) A person is disqualified from managing corporations if the person is disqualified, under an order made by a court of a foreign jurisdiction that is in force, from:
(a) being a director of a foreign company; or
(b) being concerned in the management of a foreign company.
Definitions
(7) In this section:
foreign jurisdiction means a foreign country, or part of a foreign country, prescribed by the regulations as a foreign jurisdiction for the purposes of this section.
206BA Extension of period of automatic disqualification
(1) This section applies if:
(a) under subsection 206B(1); or
(b) as a result of the operation of subsection 279‑5(1) of the Corporations (Aboriginal and Torres Strait Islander) Act 2006 and subsection 206B(5) of this Act;
a person is disqualified from managing corporations on being convicted of an offence.
(2) On application by ASIC, the Court may extend by up to an additional 15 years the period of disqualification.
(3) ASIC must apply:
(a) before the period of disqualification begins; or
(b) before the end of the first year of the disqualification.
(4) ASIC may apply only once in relation to the disqualification.
(5) In determining whether an extension is justified (and if so, for how long), the Court may have regard to any matters that the Court considers appropriate.
206C Court power of disqualification — contravention of civil penalty provision
(1) On application by ASIC, the Court may disqualify a person from managing corporations for a period that the Court considers appropriate if:
(a) a declaration is made under:
(i) section 1317E (civil penalty provision) that the person has contravened a corporation/scheme civil penalty provision; or
(ii) section 386‑1 (civil penalty provision) of the Corporations (Aboriginal and Torres Strait Islander) Act 2006 that the person has contravened a civil penalty provision (within the meaning of that Act); and
(b) the Court is satisfied that the disqualification is justified.
(2) In determining whether the disqualification is justified, the Court may have regard to:
(a) the person’s conduct in relation to the management, business or property of any corporation; and
(b) any other matters that the Court considers appropriate.
(3) To avoid doubt, the reference in paragraph (2)(a) to a corporation includes a reference to an Aboriginal and Torres Strait Islander corporation.
206D Court power of disqualification — insolvency and non‑payment of debts
(1) On application by ASIC, the Court may disqualify a person from managing corporations for up to 20 years if:
(a) within the last 7 years, the person has been an officer of 2 or more corporations when they have failed; and
(b) the Court is satisfied that:
(i) the manner in which the corporation was managed was wholly or partly responsible for the corporation failing; and
(ii) the disqualification is justified.
(1A) To avoid doubt, the references in paragraphs (1)(a) and (b) to a corporation include references to an Aboriginal and Torres Strait Islander corporation.
(2) For the purposes of subsection (1), a corporation fails if:
(a) a Court orders the corporation to be wound up under:
(i) section 459B of this Act; or
(ii) section 526‑1 of the Corporations (Aboriginal and Torres Strait Islander) Act 2006;
because the Court is satisfied that the corporation is insolvent; or
(b) the corporation enters into voluntary liquidation and creditors are not fully paid or are unlikely to be fully paid; or
(c) the corporation executes a deed of company arrangement and creditors are not fully