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BEWARE, you do not need to be a director of a corporation to be held accountable as an “officer”

by | Jun 16, 2020

After the matter of ASIC v King & Anor [2020] HCA 4 ASIC Commissioner John Price noted that:
“… sends a clear signal to anyone running a company- in name or effect-that they should be responsible and held accountable for their actions.”

If you are involved in making decisions that affect a company, even where you are not holding an office, you need to tread carefully. The High Court has now extended the definition of ‘officer’ to any person who has capacity to affect significantly a company’s financial standing.

This may even well spell danger for third parties such as consultants and lenders, managing the way a corporation attempts to work its way out of financial distress, following the Covid-19 pandemic. Although this question did not specifically arise, it appears from the separate judgment of Nettle and Gordon JJ (in paragraph 96) where the Judges alluded that such a finding can not be excluded, if this question is to be decided in future.

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