To meet obligations under Governance Standard 4, charities must be satisfied that their Responsible People (such as board or committee members, or trustees) are not disqualified by the ACNC from being a Responsible Person, nor disqualified from managing a corporation.
This means that before appointing a Responsible Person, it is vital your charity checks that they are not disqualified.
Your charity can do this by:
- searching the ACNC Register of Disqualified Persons
- searching the ASIC Banned & Disqualified Register, and
- asking your Responsible People to sign a declaration confirming that they are not disqualified, and having them agree to notify your charity if they become disqualified in the future.
We have a template Responsible Person declaration that your charity can use to confirm that its Responsible People are not disqualified.
Responsible People should ensure they have read this guidance before signing the declaration.
Disqualification from being a Responsible Person
A person is not allowed to be a Responsible Person if the ACNC has disqualified them from doing so in the previous 12 months.
In addition, someone cannot be a Responsible Person if they have been disqualified from managing a corporation within the meaning of the Corporations Act 2001 (Cth). This may occur if a person:
- has been convicted of certain offences, such as serious offences, dishonesty offences or other offences that can affect a corporation,
- is an undischarged bankrupt or is subject to a ‘personal insolvency agreement’ they have not followed, or
- has been disqualified by the Australian Securities and Investments Commission (ASIC), the Office of the Registrar of Aboriginal and Torres Strait Islander Corporations (ORIC), or an Australian or New Zealand court.
Most people will immediately know whether these categories apply to them or not.
The following information is a general guide. If you need more specific information about being disqualified from managing a corporation, contact ASIC.
If you are unsure whether you are disqualified from managing a corporation, consider if you:
- have been convicted of certain offences
- are bankrupt or under personal insolvency
- have been disqualified by a court or regulator.
Convicted of certain offences
If you have been convicted of any of the following (including offences against the law of a foreign country):
- a serious (‘indictable’) offence that involves making or participating in making, a decision that affects the whole or a substantial part of the business of a corporation (including an Aboriginal and Torres Strait Islander corporation)
- a serious (‘indictable’) offence for actions that could significantly affect a corporation’s (including an Aboriginal and Torres Strait Islander corporation’s) finances
- an offence that is a contravention of the Corporations Act or the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth) that is punishable by imprisonment for more than 12 months
- an offence involving dishonesty that is punishable by imprisonment for at least three months, or
- a serious offence against the law of a foreign country that is punishable by imprisonment for a period greater than 12 months
and
- it has been less than five years from conviction (if no prison sentence), or from release from prison for the offence, or
- a court extended your disqualification time (and it is still within this disqualification time)
you are disqualified from managing a corporation.
Bankruptcy or personal insolvency
If you have:
- ever been bankrupt (under Australian or any foreign law) and have not been discharged from this bankruptcy, or
- made a ‘personal insolvency agreement’ and not complied with the agreement
you are disqualified from managing a corporation.
Note: A personal insolvency agreement is a formal agreement between a person and their creditors, when that person cannot pay what they owe. This agreement is set out in a deed under Part X of the Bankruptcy Act 1966 (Cth) or a similar law of an external territory or a foreign country.
Disqualification by a court or regulator
If you have:
- had a New Zealand court order made against you preventing you from being a director or being involved in the management of a foreign company, or
- been disqualified by an Australian court, ASIC or ORIC and this disqualification is still current
you are disqualified from managing a corporation.
Note: If you are unsure, ASIC keeps a register of people who have been disqualified by ASIC, ORIC or an Australian court (but not by a New Zealand court) on their Banned & Disqualified Register.
If you are disqualified from managing a corporation, please do not sign the declaration.
If it is reasonable in your circumstances, the ACNC Commissioner may allow you to be a Responsible Person of a charity even if you are disqualified from managing a corporation.
Please contact us for more information.