Sydun & Co Solicitors

Company & Corporation Law

As you would expect there is a strong interplay between Company Law and the Corporations Act. This legislation is complex and detailed and directors need guidance in order to comply with their obligations under it.

Breach of directors duties are often done inadvertently especially for small proprietary companies. Directors of these companies fail to see the distinction between their personal assets and the company’s assets and between their personal interests and the best interests of the company.

This can cause serious problems for directors especially where the company is struggling with cash flow or is insolvent.  Transfers of assets from a company to close associates or family members of the directors can be set aside by a liquidator and directors can be sued for insolvent trading.

The introduction of Director Identity Numbers is part of a process of monitoring the activities of directors and disqualifying those which breach the Corporations Act.

Presiding over phoenix activities in which assets are moved to a new company leaving only debts and unsatisfied creditors behind is subject to much stricter rules now to make it easier to hold these directors to account and recover assets moved out of the company.

 

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Company & Corporation Law

Then there is the record keeping and notifications required to conduct the business of a company properly. These should be recorded in the company register including minutes of resolutions, changes to share owners and company officers, the company’s registered office and principal place of business.

Every time there is a change in the company such as shareholders, company officer, shares, addresses and other matters ASIC must be notified. There are penalties for late notice which can add up quickly if these obligations are ignored.

Some companies may need to buy back shares. This is a complex process and should only be undertaken with the benefit of expert legal advice.

Large proprietary companies are subject to mandatory disclosure of financial accounts and often have audit requirements. An application for exemption from some of these requirement may be granted by ASIC depending upon the circumstances.  Decisions made by ASIC in this regard can be appealed in the Administrative Appeals Tribunal.

Some companies are trustees of discretionary, unit and hybrid trusts.  Using trusts can assist with asset protection.  There are taxation traps for the inexperienced in the use of trusts, especially where a trust is used to hold the family home or changes to the trust deed are required after the trust has been set up.

At Sydun & Co we help our clients to navigate their way through the record keeping, compliance and other requirements of the Corporations Act and equip them to better understand their corporate vehicle and company law requirements in general.

Examples of our work include:

Share buy backs;

Amendments to constitutions;

Amendments to trust deeds and taxation implications of such changes;

Company secretarial work (record keeping and reporting);

Advice on insolvency matters; and

Directors’ duties and fiduciary duties.