Don't take being a Director lightly

company Directors have Grave Responsibilities
The directors and officers of the company are responsible for ensuring that the company maintains proper records to provide the following:

  1. A true and fair reflection of the financial position of the company at any time.
  2. Financials statements prepared when required.
  3. All taxation requirements being complied with.

If your company is a small private company then you will not be required to provide formal financial reports under the Corporation Law. You will still need to complete reports for taxation purposes for the IRS. These would simply amount to financial statements and balance sheets that confirm the profit on which your company will be taxed.

You Can Become Personally Liable
If you are a director, then you could be personally liable for company debts.

This would arise in situations such as:

  • Where you continue trading even though as a director you knew the company was insolvent.
  • If you continue trading when the value of the debts incurred are greater than the value of the assets of the company.
  • If you continue trading if the debts incurred are to your knowledge, not likely to be able to be paid when they fall due.
  • If you trade when you know the company was not properly constituted under the Corporation Law.
  • If you continue trading when you know that the company has not been properly described in the documentation involving outside parties e.g. if the word LTD is not included in the company name on its invoices etc.