Disputes between officeholders and/or members of small proprietary companies

What are disputes about the running of companies?

Disputes that arise in small proprietary companies are often about the running of the company. They may be disagreements between individuals over the ownership, management or control of the company.

These types of disputes commonly arise in small proprietary companies. These companies usually have relatively few shareholders. The disputes generally relate to the private rights or interests of individuals, such as shareholders and business partners.

The company constitution is the most important document for a company and contains the rules that govern its operation. Under the Corporations Act 2001 (Corporations Act), the constitution acts as a contract between the company, its directors and its members.

This means that those involved in the company can go to court to seek compliance with the terms of the company’s constitution. There are other remedies as well, so we strongly advise you to seek legal advice. 

What you should do

These types of disputes are best resolved with the benefit of legal advice and communication between the parties.

Seek legal advice

We recommend you seek legal advice to discuss the matter or resolve it through mediation.

If you are unsure about how to access legal advice, contact the Law Society in your state or territory.

Get more information

Check what company officeholders are obliged to do under the law and what members’ rights are

ASIC and disputes about the running of companies

Disputes between officeholders and/or members of small proprietary companies generally relate to the legal rights of those involved under the constitution of the company. As such, they do not affect consumers or investors in the broader community.

For this reason, our role in helping you resolve this kind of dispute is limited to recommending you seek legal advice. That legal advice will help clarify the legal issues involved in your problem and might include options such as mediation, instituting private court action, or accessing some of the remedies available to members under the Corporations Act, again through court action.

We do not give legal advice.

While we can take action where there has been a breach of the Corporations Act, we exercise our discretion in deciding whether to investigate a report of a potential breach.

Generally, we do not act for individuals and will only take action where it will result in a greater impact in the market and benefit the general public more broadly. 

Where can I get more information?

Download this information sheet as a PDF (112KB)

This is Information Sheet 162 (INFO 162), issued in July 2013. Information sheets provide concise guidance on a specific process or compliance issue or an overview of detailed guidance.

Whistleblowing

Guidance for company officers and company auditors on the whistleblower protection regime

30 June 2020

Information sheets to help companies, company officers and company auditors understand and comply with their whistleblower protection obligations

Whistleblower protections

Answers to common questions on the rights and protections for whistleblowers

Business ethics: New challenges, better theories, practical solutions
A speech by ASIC Commissioner John Price, 9 December 2019. John discusses the important role whistleblowing can play in fostering an ethical culture for business.

ASIC gives guidance on companies’ whistleblower policies and relief to small not-for-profits
Media release 19-308MR. 13 November 2019

Whistleblower protections for not-for-profit organisations, 29 May 2019

 


Whistleblowers and the Corporations Act

Corporations Act Whistleblowing

ASIC Executive Director Warren Day talks about whistleblowers and the important role they play in identifying and calling out misconduct and harm to consumers and the community.

Read the transcript

ASIC and whistleblowers

Asic Whistleblower Thmb

ASIC Executive Director Warren Day discusses when ASIC will act on whistleblowing information.

Read the transcript


Fair Work Ombudsman

You can contact the Fair Work Ombudsman if you would like to report someone who isn't complying with workplace laws or you need help in resolving a workplace issue.


Last updated: 04/07/2019 10:57