Personal liability of Australian company directors

July 2017

Under certain circumstances, a director may be personally liable for the company’s debts and other losses.

Company losses caused by breach of directors’ duties

A director may become personally liable where they have breached their duties, and as a result the company to suffers loss.

Under these circumstances a director may have acted illegally, been in breach of civil or criminal provisions of the Corporations Act 2001 (Cth) (Corporations Act) and may have to compensate the company for the loss.

For further information in relation to directors’ duties, refer to our article entitled “Directors Duties for Australian Companies”.

Competition and Consumer Act

The Competition and Consumer Act 2010 (Cth) (CCA) (formerly known as the Trade Practices Act 1974 (Cth)) contains rules against anti-competitive conduct to ensure that there is fair and effective competition within Australia.  It also contains consumer protection rules – known as the Australian Consumer Law (ACL) – which businesses must abide by in their dealings with consumers.      

For some breaches of the CCA directors may be found to be personally liable.  Penalties for breaches include fines and or terms of imprisonment.

Occupational health and safety laws

The Occupational Safety and Health Act 1984 (WA) (OSHA) (and equivalent legislation in other States) imposes obligations to ensure the health, safety and welfare at work of employees, contractors and other persons.

Where a company is guilty of an offence under the OSHA, any director of the company may also be guilty of that offence.  In this instance a director may face criminal penalties, including fines and terms of imprisonment.

Environmental protection laws

All Australian States and Territories have enacted environmental protection laws for the prevention, control and abatement of environmental pollution and for the conservation, preservation, protection, enhancement and management of the environment.

In Western Australia, where an offence committed by the company is proved to have been committed with the consent or knowledge of a director, or due to any neglect on his or her part, the director may also be guilty of the offence.


Directors may be prosecuted personally for tax offences committed by the company.

It is a defence to liability if a director did not aid, abet, counsel or procure the act or omission of the company and was not in any way knowingly involved in or a party to that act or omission.


All employers in Australia must provide a minimum level of superannuation each quarter for each employee. If the employer fails to provide that minimum level of superannuation, the employer will be liable to pay the superannuation guarantee charge.

Directors of companies that employ staff may be personally liable for an amount equal to the superannuation guarantee charge that the company owes.


This article contains comments of a general nature only, does not constitute legal advice and may not be relied upon as such.  This article also summarises aspects of the Corporations Act as at the date it was written and may not take into account any recent or subsequent developments in the law or regulation.  The article is not a substitute for specific professional advice.  No responsibility is accepted by Eaton Hall or the author(s) for any loss occasioned to any person doing anything as a result of anything contained in this article.