It was the case years ago that companies gave limited liability. Over the years this has been watered down. Firstly company law extended liability to officers, which means that if you act like a Director, but you aren’t a Director, you are probably an Officer. The fact that you aren’t a Director is irrelevant as you will be deemed one. We see this from time to time and it is scary when we advise our clients of the risks and nothing is done.
Now the taxation laws have changed and include personal liability for Directors for unpaid superannuation, unpaid employee Pay As You Go tax and other income tax obligations. Please don’t venture into these areas without getting advice. Putting a company into administration may not work to save the personal liability.
We see people act as Directors and/or Public Officers of companies, where they are not shareholders and have no active involvement in the company affairs. Wow! “I didn’t know” will not get you far – you are deemed to know. You must know. Why have no gain but be prepared to take the pain?
If you are in this situation you should receive a commercial Directors’ fee, have regular updates and meetings and also some insurance protection paid by the company.
Phil Browne - FCA - Managing Partner Registered Company Auditor / Registered SMSF Auditor / Trust Accounts Examiner
Throughout his career, Phillip has been an entrepreneurial, creative and innovative business consultant. As a Chartered Accountant, Phil has worked with numerous individuals, businesses, clubs and charities in various stages of their business lives. From start-up structures to tax planning and director solvency advice, Phillip's creative and knowledgeable approach has provided support and success for his clients.
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