Small business directors defined

Small business owners are offered a helping hand with a new online resource explaining roles and responsibilities of company directors.

Released by ASIC, the resource may be useful to brokers when initiating discussion with their small business clients about directors and officers insurance.

Furthermore, the guide offers a reminder to owners of brokerages, and particularly authorised representatives, of their obligations as director of a company.

The guide offers an overview of director duties under the Corporations Act, covering important information, including:

  •      what it means to be a company director
  •      how to become a company director
  •      directors’ key responsibilities
  •      directors’ liabilities when things go wrong
  •      how to resign as a director

“ASIC’s guide for small business directors is particularly useful for small businesses looking to change from a sole trader to a company business structure,” ASIC Commissioner Greg Tanzer says.

“Small businesses need clear and accessible information so they can make informed decisions about their business structure and meet their responsibilities.”

“ASIC’s guide is part of a suite of resources produced by the Australian Taxation Office, Department of Industry and Science and ASIC to help small business owners understand the difference between operating as a sole trader and a company and the key responsibilities of company directors, including potential liabilities if things go wrong,” Tanzer says.