Material Personal Interest – Director’s Duty to Disclose
Examples of Material Personal Interest – Director’s Duty to Disclose
- A director owns a business which the company invests in.
- A director owns property which the company is interested in purchasing.
What is the legal definition of Material Personal Interest – Director’s Duty to Disclose?A director must disclose a material personal interest where a conflict arises. A personal interest includes (but is not limited to) a legal or equitable interest.
The Corporation Act 2001 defines a ‘director’ as:
- a person who:
- is appointed to the position of a director; or
- is appointed to the position of an alternate director and is acting in that capacity;
- unless the contrary intention appears, a person who is not validly appointed as a director if:
- they act in the position of a director; or
- the directors of the company or body are accustomed to act in accordance with the person’s instructions or wishes.
LegislationThe relevant legislation which deals with this offence is section 191 of the Corporations Act 2001. Section 191(2) of the Corporations Act 2001 is also relevant as it provides a list of circumstances in which a director does not have to disclose a conflict of interest.
Elements of the offenceTo prove this charge, ASIC must show that the accused was a director of a company and that the accused failed to give notice to the other directors of a material personal conflict of interest.
“Can ASIC prove that you did not disclose a conflict of interest?”
- Factual dispute
- No duty was owed
- No conflict existed
- Notice was given
- Lack of intent
You should contact us immediately and discuss your case with one of our lawyers if you have been charged with this offence.
Questions in cases like this
- Did you disclose the conflict to the co-directors?
- Were minutes of the meeting taken where you made the disclosure?
- Does a conflict of interest actually exist?
The maximum penalty for Material Personal Interest – Director’s Duty to Disclose (s191 of the Corporations Act 2001) is 10 penalty units (around $1,610.00) or 3 months imprisonment.
Deciding on whether to plead guilty or not has consequences for you and should be made after proper discussion with a criminal lawyer.