Director Banning Orders
The ASIC may disqualify a person from acting as a director or being involved in the management of a company.
Section 206F of the Act broadly states that;
ASIC may disqualify a person from managing corporations for up to 5 years if within 7 years they have been an officer of 2 or more corporations that have been wound up in insolvency and those companies have been unable to return at least 50 cents in the dollar to the ordinary unsercured creditors.
In determining whether a disqualification is justified, ASIC must have regard as to whether the 2 or more failed corporations were related to one another and also the persons conduct, and whether the disqualification is in the public interest and any other appropriate matters.
ASIC can apply for orders disqualifying a person from managing corporations for up to 20 years if they have been an officer of two or more companies that have failed within the last 7 years, and the way in which the companies were managed contributed to the failures.
Section 206D of the Act broadly states that the Court may disqualify a person from managing corporations for up to 10 years if within 7 years they have been an officer of 2 or more corporations that have been wound up and that the person has been wholly or partly responsible for the insolvency of the corporations.
