AUSTRALIA: CAN A COMPANY BE A SHADOW DIRECTOR OF ANOTHER COMPANY?

On 19 May, an article from Hall & Wilcox reflected on a recent High Court case.  It explains that to be considered a shadow director of a company, the directors of that company (acting as a board) must be ‘accustomed to act’ in accordance with that person’s instructions or wishes.  It then explains that, although a corporation or other body corporate cannot formally be appointed to the position of a director, a company can be a shadow director of another company.  The article says that it is important for companies (and individuals) to be aware of their relationship with, and influence over, the board of a company, and understand the risk of being deemed to be a director of that company and, among other things, a shadow director may be liable for insolvent trading of a company.

https://hallandwilcox.com.au/thinking/can-a-company-be-a-shadow-director-of-another-company/

 

 

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Author: raytodd2017

Chartered Legal Executive and former senior manager with Isle of Man Customs and Excise, where I was (amongst other things) Sanctions Officer (for UN/EU sanctions), Export Licensing Officer and Manager of the Legal-Library & Collectorate Support Section

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