Safe Harbour Provisions in Company Law

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Company Law
Safe Harbor

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Table of Contents
Introduction...............................................................................................................................2
Background................................................................................................................................3
Issue............................................................................................................................................4
Analysis.......................................................................................................................................4
Recommendations.....................................................................................................................6
Conclusion..................................................................................................................................7
References..................................................................................................................................8

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Introduction
A corporate entity has a separate legal existence from its members; however, its
operations are managed by directors. Various duties are imposed by the Corporations Act
2001 (Cth) on directors to make sure that they discharge their duties while prioritising the
interest of the company. However, there are various issues faced by the directors and
companies in relation to the imposition of these duties (Marshall & Ramsay, 2012). Effective
compliance with these duties is important for directors to make sure that they avoid legal
consequences. The objective of this report is to evaluate a recent issue that affects
corporations in Australia. The issue of recent changes brought by the government in the
duties of directors will be evaluated in this report to understand its impact on companies in
Australia. Particularly, this report will focus on the issue of ‘safe harbour’ provisions
implemented by the government under section 588GA. This report will evaluate the
background of this issue and evaluate how these provisions changed the duties of directors
and the remedies available for them under the Corporations Act. Lastly, recommendations
will be made, and a conclusion will be drawn based on the analysis of the issue.