How we enforce the law
The action we can take against companies and directors
While we aim to make it easy for our customers to comply with their legal obligations, if you don't comply we take action that can sometimes result in prosecution.
Enforcement action we can take
When there is a breach of the law, we can:
- give a formal warning
- issue an infringement notice
- suspend or cancel the registration of a company or an individual
- ban ('prohibit' or 'disqualify') a director from managing companies.
If a breach is serious we can prosecute the company or an individual. Some breaches of the law carry heavy penalties.
Our enforcement
Common breaches that result in prosecution
Most prosecutions arise because:
- the company doesn't keep the documents and records they have to
- a director or other person provides false information or makes a false statement to us
- directors fail to provide company records or conceal company records from the liquidator when their company fails
- a director or manager acts for the company while they're banned ('disqualified' or 'prohibited')
- the company carries on business with the intention to defraud creditors
- a director fraudulently takes or uses company property for their own benefit
- a director acts as a director or manager of a phoenix company.
We take action under several acts, including:
- Companies Act 1993
- Financial Reporting Act 2013
- Receivership Act 1993
- some offences under the Crimes Act 1961.
Publishing convictions
We publish successful convictions. The information includes:
- the name of the person
- the reason they were prosecuted and the section of the Act they breached
- any sentence they received, or fines and costs they must pay.
Directors who fail to meet their obligations
You can be banned (‘prohibited’) from being a company director if we find that you have mismanaged your company. You can also be banned if you’re convicted of certain offences.
The length of your ban depends on which section of the Companies Act 1993 you're prohibited under.
If you break the terms of your prohibition you can be:
- imprisoned for up to 5 years, or
- fined up to $200,000.
Penalties for not filing financial statements
Not all companies have to register financial statements.
If your company fails to register audited financial statements, the Companies Office can issue a $7000 infringement penalty to each director of the company.
If you suspect illegal activity
If you think a company or its directors have acted illegally, you can report this to us using our online form.
Make a complaint
Other guides in
Complying with the law
- Keeping company records
- Reporting to the Companies Office
- Company meetings
- Keeping company records
- How to file an annual return
- Reporting to the Companies Office
- Who needs to submit financial statements
- What it means to be a director
- Banned directors
- What it means to be a shareholder
- Making a complaint