AUSTRALIA Law and Practice Contributed by: Scott Colvin, Warren Scott and Lachlan Speirs, Archer Scott Lawyers
Public companies, and large proprietary companies that meet two of three thresholds for revenue, gross assets and employees, must prepare, have audited and lodge annual financial reports. Small proprietary companies are generally exempt, but a small propri - etary company that is controlled by a foreign company must usually lodge audited accounts, unless relief applies. These obligations are relevant in transac - tions because they determine the financial information available on a target. Companies must maintain a register of members, while substantial-holding disclosure applies princi - pally to listed companies and registered schemes rather than to private companies generally, and a broader beneficial ownership transparency reform is in progress. Customer due diligence under anti-mon - ey laundering law, which from 1 July 2026 extends to certain designated services provided by lawyers, conveyancers, accountants and real estate agents, is increasing scrutiny of ultimate beneficial ownership in dealings and acquisitions. Disclosure (typically via a prospectus or other disclo - sure document) is required when raising capital. There are exemptions and short-form disclosures where the capital raise is limited to sophisticated investors. Where the company operates a franchise system, complex franchising disclosure documents are required. Australia is a highly regulated environment, and indus - try-specific registrations, permits and disclosures are typically required. 3.4 Management Structures Australian companies have a single-tier board; there is no separate supervisory board or two-tier struc - ture, but the company may adopt an informal advisory committee-style body. The directors are responsible for managing or supervising the management of the company, and day-to-day operations are usually del - egated to officers and senior management. A public company must have at least three directors and a company secretary, while a proprietary com - pany needs only one director and is not required to
appoint a secretary. Shareholders exercise residual powers in general meetings, including amending the constitution and approving certain related-party and major transactions. Listed companies are additionally subject to the Listing Rules and the corporate govern - ance recommendations of the Australian Securities Exchange. 3.5 Directors’, Officers’ and Shareholders’ Liability Directors and officers owe statutory duties under the Corporations Act, including the duty of care and dili - gence (protected by the business judgement rule), the duty to act in good faith and for a proper purpose, and the duty not to misuse their position or information, alongside equivalent general law and fiduciary duties. Directors may also be personally liable for insolvent trading where a company incurs debts while insolvent, subject to the safe harbour available where they pur - sue a course of action that is reasonably likely to lead to a better outcome for the company. Personal exposure can arise under tax law through director penalty notices, and under work health and safety, environmental, competition (including as an accessory) and franchising laws. Breach can lead to civil penalties, compensation, disqualification and, for dishonest conduct, criminal liability. Limited liability is the governing principle, and Aus - tralian courts only rarely pierce the corporate veil, generally where there is fraud or a sham or a genu - ine agency, with specific statutory exceptions such as insolvent trading. In acquisitions, directors’ and officers’ insurance, indemnities and run-off cover are standard, and buyers assess director penalty and accessorial exposure as part of diligence.
4. Employment Law 4.1 Nature of Applicable Regulations
Most private sector employment is governed by the national workplace relations system established by the Fair Work Act 2009 (Cth). The National Employ - ment Standards set a floor of minimum entitlements; modern awards set additional industry and occupa - tion minimums; and enterprise agreements, individual
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