Corporate Governance is an important part of the administration of any business in which a company is involved. That also includes where the company is simply a corporate trustee, but also when the company is used for trading, holding assets, and any other purpose. It’s often something that small business overlooks when running their business affairs. Clients engage us to assist then in ensuring that the rules governing the running of companies are complied with.
It’s very important to ensure strong corporate governance, especially as a form of protection from liabilities that can arise from failing to do so. That can include fines from ASIC, the ATO, and other governmental bodies (such as APRA) but it also includes issues, disputes, and problems which may arise between shareholders, directors, beneficiaries (in the case of corporate trustees). Any number of disputes that may arise inevitably involve a later analysis, as to whether the rules of the company (or even company policies) were adhered to. A failure to follow those rules and comply with procedures can have serious consequences for the interested parties. Some of the consequences include the invalidation of actions taken by the company, the piercing of the “corporate veil” rendering individuals personally liable, and causing the company to be in violation of the law, amongst other things.
There are special rules which allow small companies to operate without as much formality regarding compliance, but these rules do not alleviate the requirement of compliance altogether. For this reason, it is very important that sound advice is obtained regarding what is expected and required of individuals who set up a company, not only at the time of its creation but also going forward. These procedures include even the basic steps that need to be taken including notifications and record keeping, to have meetings of members, meeting of directors, passing resolutions, discussing and tabling proposed resolutions, registering changes relating to the company and its structure, and many others.
At our firm, we often provide these services to our clients and they range from giving clarification and advice to sophisticated and well experienced corporate officers right through to more extensive services which a company secretary would often attend to, and range from drafting resolutions, filing forms with ASIC, preparing and circulating minutes of meetings. Some of our clients have their registered office at our premises and we hold their corporate registry folder for them.