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Responsible for the corporation failing ii

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responsible for the corporation failing (ii) disqualification is justified A.4 Compensation Order Under {s 1317H Corporations Act } there can be an order of the court that a person who has contravened a civil penalty provision, compensate the company for damage resulting from the contravention o For insolvent trading the order of compensation is made under {s 588J Corporations Act} Under {s 1317H(2) Corporations Act} the order for ‘compensation’ will include in calculating the compensation, compensation in relation to loss suffered by the company AND any profits made by the person as a result of contravention The application to the court may be made by the company OR ASIC {s 1317J Corporations Act} Additionally there is no requirement that a declaration of contravention under s 1317E be made therefore allowing the company independent of ASIC to seek an order of compensation B. Criminal Consequences There can be criminal consequences for persons that have breached any of the following:
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o Duty of Good Faith {s 181(1) Corporations Act} o Duty to Act of Proper Purposes {s 181(1) Corporations Act} o Duty to Avoid Conflicts of Interest {s 191 Corporations Act} o Duty to Not Profit {s 182/3 Corporations Act} o Duty to Prevent Insolvent Trading {s 588G(2) Corporations Act} o Related Party Transactions {s 344(1) Corporations Act} There used to be a bar on subsequent prosecution of criminal offence where proceedings for a civil penalty had commenced – however this operated as a disincentive for ASIC to commence civil proceedings and has been removed {CLERP} Now if both types of proceedings are commenced, evidence in the course of proceedings for a pecuniary penalty order is not admissible against the person in prosecution for a criminal offence where the conduct alleged to constitute the office is substantially the same as the conduct that was claimed to constitute contravention {s 1317Q Corporations Act} If criminal proceedings are commenced when civil proceedings for a declaration of contravention or pecuniary penalty order in relation to substantially the same conduct are already on foot, the civil proceedings are stayed {s 1317N Corporations Act} o They may be resumed if the person is not convicted, but otherwise are dismissed B.1 Criminal Consequences for Breach of Duty of Good Faith, Proper Purpose, No Profit For an contraventions of { s 181, 182 or 183 Corporations Act} criminal offences can also apply (1) Duty of Good Faith and Proper Purposes Under { s 184(1) Corporations Act} a director or other officer of a corporation commits an offence if they: o (a) are reckless or; o (b) are intentionally dishonest ; and fail to exercise their powers and discharge their duties: o (c) in good faith in the best interests of the company o (d) for a proper purpose Therefore the requisite men’s rea is reckless or Intentionally dishonest NOTE: This provision only applies to directors and officers (2) Duty to Avoid Conflicts and Not Profit Under { s 184(2) Corporations Act}
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responsible for the corporation failing ii disqualification...

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