News / The Directors' Liability Reform Amendment Act 2013 /
The Directors' Liability Reform Amendment Act 2013
7 November 2013
The Directors' Liability Reform Amendment Act 2013 received Royal Assent on October 29th.
The main objectives of these reforms are to amend previous legal provisions applying to executive officers and their personal liability for offences committed by a corporation, with a view that action only be taken where there is adequate justification to do so. It is intended there be a reduction of red tape for Queensland businesses and a closer alignment of Queensland legislation with the corporate liability principles and guidelines outlined by the Council of Australian Governments (COAG).
The range of offences with which a director of a company may be charged has been greatly reduced. These changes have been made, in part, as a result of past tendencies to apply blanket liability across entire statutes holding individuals to account for corporate transgressions. Examples of offences for which an office holder may now be liable include:
- Instances where an offence has the potential to cause "significant public harm"
- Where a corporation is unlikely to comply with a statutory requirement on its own
- Where the director's misconduct is clear with regards to their influence and decision-making within the company
It was envisaged by business groups that the reduction in red tape initiated by the Act may allow for improved economic growth where proprietors will feel more free to make entrepreneurial decisions without the spectre of personal liability unduly affecting their choices.
For more information contact:
Mark Madsen | Partner
t +61 7 3224 0241
f +61 7 3224 0333