THE CORPORATIONS LAW

CHAPTER 2D - OFFICERS AND EMPLOYEES

PART 2D.6 - DISQUALIFICATION FROM MANAGING CORPORATIONS

SECTION 206F   ASIC'S POWER OF DISQUALIFICATION  

206F(1)  Power to disqualify.  

ASIC may disqualify a person from managing corporations for up to 5 years if:

(a)  within 7 years immediately before ASIC gives a notice under paragraph (b)(i):

(i) the person has been an officer of 2 or more corporations; and

(ii) while the person was an officer, or within 12 months after the person ceased to be an officer of those corporations, each of the corporations was wound up and a liquidator lodged a report under subsection 533(1) about the corporation's inability to pay its debts; and

(b)  ASIC has given the person:

(i) a notice in the prescribed form requiring them to demonstrate why they should not be disqualified; and

(ii) an opportunity to be heard on the question; and

(c)  ASIC is satisfied that the disqualification is justified.

206F(2)  Grounds for disqualification.  

In determining whether disqualification is justified, ASIC:

(a)  must have regard to whether any of the corporations mentioned in subsection (1) were related to one another; and

(b)  may have regard to:

(i) the person's conduct in relation to the management, business or property of any corporation; and

(ii) any other matters that ASIC considers appropriate.

206F(3)  Notice of disqualification.  

If ASIC disqualifies a person from managing corporations under this section, ASIC must serve a notice on the person advising them of the disqualification. The notice must be in the prescribed form.

206F(4)  Start of disqualification.  

The disqualification takes effect from the time when a notice referred to in subsection (3) is served on the person.

206F(5)  ASIC power to grant leave.  

ASIC may give a person who it has disqualified from managing corporations under this Part written permission to manage a particular corporation or corporations. The permission may be expressed to be subject to conditions and exceptions determined by ASIC.