Combatting financial abuse perpetrated through coerced directorships

Give feedback on options to reduce harms from coerced directorships.

These options aim to:

• make it harder to register or appoint directors without their clear consent

• make sure victim-survivors can access defences for insolvency-related directors’ duties

• extend the timeframe to respond to Director Penalty Notices

• hold perpetrators to account for harm.

Share your views on how feasible and effective these policy options are.

Coerced directorships

Perpetrators can use tax and corporate systems to financially abuse victim-survivors. One way is through coerced directorships. This is when a victim-survivor is forced or tricked into becoming the director of a company.

The perpetrator then runs the company and keeps the benefits. The victim-survivor can be left responsible for managing the company. This includes being responsible for debts.

This can lead to harm for other third parties that deal with the company. These parties include suppliers and other creditors.

Background

The Australian Government committed to cracking down on financial abuse. This paper responds to part of this commitment.