All Questions Business Set Up What is the difference in liability between company directors and secretaries in Australia?
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What is the difference in liability between company directors and secretaries in Australia?


Directors in Australia face higher personal liability. They're legally obligated to manage the company responsibly, making decisions with care, avoiding conflicts of interest, and always acting in the company's best interest. If they don't, they can be held personally accountable, especially if they breach fiduciary duties or allow the company to trade while insolvent.

On the flip side, company secretaries generally face less liability. Their role includes tasks like signing official documents and lodging forms with ASIC. But while they might have powers similar to directors, they don't usually carry the same heavy duties. They still, however, can be penalised for not lodging necessary documents with ASIC or for fraudulent activities.

For both roles, it's crucial to check the company's constitution or shareholders' agreement. Sometimes, these documents specify extra duties or liabilities.

And a side note: in smaller Australian companies, it's not rare for one person to be both the director and the company secretary. This means they'd take on responsibilities—and potential liabilities—of both roles.

Alex is Sprintlaw’s co-founder and principal lawyer. Alex previously worked at a top-tier firm as a lawyer specialising in technology and media contracts, and founded a digital agency which he sold in 2015.

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