Manage Corporation Whilst Disqualified

The maximum penalty for the offence of manage corporation whilst disqualified is 12 Months imprisonment and/or a $5,500 fine.

Which court will hear the matter?

This matter is a summary offence and will be dealt with in the Magistrates Court.

What the prosecution must prove

In order for a court to find an accused guilty of this offence beyond a reasonable doubt, the prosecution must prove:

  •  That they were disqualified from managing a corporation under a specific part of the Corporations Act (Part 2D.6);
  • That they made decisions which affected the whole or a substantial part of the business; which had the capacity to significantly affect a corporations financial standing; or that they communicated instructions to the directors of the corporation which were not given by way of advice and fall within their professional capacity within the corporation, and the directors were accustomed to act in accordance with their instructions

Possible defences

An accused has a defence to this charge if they had obtained permission from ASIC to act as a director.

An accused will also be able to successfully defend the charge if they can show that they were not acting in a management capacity but rather, were simply providing advice and/or guidance whilst the actual directors maintained the ultimate decision-making capability.


It is an offence under Section 206A of the Corporations Act to manage a corporation whilst disqualified from doing so.

Common reasons for disqualification

A person will be disqualified from managing a corporation if:

  • They have been declared bankrupt
  • They have been convicted of a major offence under the Corporations Law or an offence of dishonesty under the state legislation.
  • They have been disqualified by ASIC directly or by court order for conduct related to previous poor management of companies.

If you require legal advice or representation in any legal matter please contact Armstrong Legal. 


If you suspect that you may be under investigation, or if you have been charged with an offence, it is vital to get competent legal advice as early as possible. Our lawyers are highly specialised in corporate crime and will be able to guide you through the process while dealing with the various authorities related to your matter.


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