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As a director of a company, there are situations in which you may be liable to being fined by the Australian Securities and Investment Commission or will be liable for damages in a lawsuit.
A Deed of Access & Indemnity is a contract that seeks to limit the liability of a director even further than what is covered by the company structure.
What Is A Deed Of Access & Indemnity?
A Deed of Access & Indemnity is a legal document that protects directors when performing their company duties. This is a common legal document that directors will request before taking on the role.
A Deed of Access & Indemnity operates by explicitly setting out a number of considerations. These include:
- Allowing directors access to company books and records
- Indemnifying directors against legal costs and liabilities (as far as is possible) — generally through ensuring that the company promises to pay the director for any liabilities and legal costs that arise from being a director of the company
- Requiring that the company takes out ‘directors and officers insurance’ to further cover any potential liabilities or legal costs of the directors
Why Do I Need A Deed Of Access & Indemnity?
A company structure is normally enough to limit a director’s personal liability. However, there are certain exceptions to this.
Some examples of situations in which a director may incur personal liability include when a company incurs debts while insolvent, or when a company has failed to satisfy financial obligations to employees, such as withholding PAYG tax or superannuation.
There are a number of other situations in which directors may incur personal liability for their company’s actions. Having a Deed of Access & Indemnity will ensure that directors are protected from liability to the greatest extent possible.
Need Help?
At Sprintlaw, our expert corporate lawyers can draft your Deed of Access & Indemnity to ensure that directors are protected in situations where personal liability may arise.
At Sprintlaw, we focus on drafting technical yet easy to understand and user-friendly agreements for businesses.
Feel free to get in touch with us to get things started with your Deed of Access & Indemnity! Our friendly team can be reached at 1800 730 617 or at team@sprintlaw.com.au.
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