Comply with directors' general law and statutory duties
Directors owe duties of care and diligence (s 180), good faith (s 181), no improper use of position (s 182) or information (s 183).
Who must comply
All directors and officers of companies.
What triggers it
Holding office as a director or officer.
When due
Continuous obligation.
Evidence required
Board minutes showing informed decision-making, registers of interests, conflict-management protocols.
Max penalty
Civil penalty up to $1.65M for individuals (5,000 penalty units), or 3× benefit; criminal for dishonest conduct
Summary
Directors' duties under the Corporations Act 2001 (Cth) require directors to act with reasonable care and diligence, in good faith in the best interests of the company, not to improperly use their position or information for personal gain or to cause detriment, and to prevent insolvent trading. The business judgment rule (s 180(2)) provides a safe harbour for honest, informed decisions made in good faith.
Enforced by
Source legislation
Entity types
Topics
Related obligations
- CWLTHApply for a Director Identification Number (Director ID)Every director needs a Director ID before appointment — apply via ABRS.
- CWLTHPrevent insolvent trading (s 588G)Directors must prevent the company incurring debts while insolvent — or face personal liability.
- CWLTHComply with corporate whistleblower protections (Part 9.4AAA Corporations Act)Public companies and large proprietary companies must have a whistleblower policy and protect disclosers.
- CWLTHPay company PAYG/GST/SG or face Director Penalty Notice (DPN)Directors personally liable for unpaid company PAYG, GST + SG via DPN regime.
- CWLTHAppoint voluntary administrator under Part 5.3A Corporations ActDirectors can place company in voluntary administration when insolvent — pause creditor claims for restructuring window.
- CWLTHSimplified Debt Restructuring (small business)Small companies (<$1M liabilities) can use SDR to restructure without full external admin.
Frequently asked questions
- Who must comply with directors' general law and statutory duties?
- All directors and officers of companies.
- What triggers directors' general law and statutory duties?
- Holding office as a director or officer.
- When is directors' general law and statutory duties due?
- Continuous obligation.
- What is the maximum penalty for directors' general law and statutory duties?
- Civil penalty up to $1.65M for individuals (5,000 penalty units), or 3× benefit; criminal for dishonest conduct
- What evidence is required for directors' general law and statutory duties?
- Board minutes showing informed decision-making, registers of interests, conflict-management protocols.
Source: https://asic.gov.au/for-business/running-a-company/company-officeholder-duties/. Rules Mate is not a law firm. Always verify against the live regulator source before acting.