Director Using Company Money for Personal Use: The Legal Consequences Under Section 184

A construction director used $1.2 million of company money to fund gambling, cash withdrawals, iTunes subscriptions, and hotel stays. She was the sole signatory on her company’s bank accounts. The withdrawals happened over nearly two years. By the time it was discovered, the companies had collapsed into liquidation and the creditors were left holding the losses.

In July 2026, Vickie Vella was sentenced to 18 months’ imprisonment, served by way of an Intensive Corrections Order, after pleading guilty to a charge under s 184(2)(a) of the Corporations Act 2001 (Cth). As a direct result of her conviction, she was automatically disqualified from managing any corporation for five years.

The Vella case is not unique. ASIC’s enforcement record in 2025-26 included 25 criminal convictions, a record high. The pattern that prosecutors and liquidators look for is the same across these cases: company funds flowing to a director’s personal accounts, for personal expenses, with intent to gain advantage or cause detriment.

If you are a director who has taken company money for personal use, or if you suspect a co-director or business partner is doing it, this article explains the legal consequences, what ASIC and liquidators look for, and what to do now.

This is general information only and is not legal advice. You should obtain professional advice specific to your circumstances.

What Does Section 184 of the Corporations Act Actually Prohibit?

Section 184 of the Corporations Act 2001 (Cth) is the criminal end of the director duties framework. It operates alongside the civil duties in ss 180 to 183, but the consequences are categorically different: criminal conviction, imprisonment, and automatic disqualification.

Section 184(2)(a) makes it a criminal offence for a director or officer to use their position dishonestly, with the intention of directly or indirectly:

• gaining an advantage for themselves or someone else; or
• causing detriment to the corporation.

The maximum penalty at the time of Vella’s offending was 5 years’ imprisonment, 2,000 penalty units, or both. For offences committed after 1 March 2019, the maximum penalty increased to 15 years’ imprisonment and 4,500 penalty units under the Treasury Laws Amendment (Strengthening Corporate and Financial Sector Penalties) Act 2019 (Cth).

Section 184(1) covers the same conduct in relation to the use of information. A director cannot use information obtained through their role dishonestly to gain a personal advantage.

The critical word in both provisions is dishonestly. This is not a civil negligence standard. ASIC and the Commonwealth Director of Public Prosecutions (CDPP) must prove beyond reasonable doubt that the director acted dishonestly by the standards of ordinary people. The prosecution in the Vella matter had no difficulty meeting this standard. The withdrawals were systematic, extended over nearly two years, and the purpose was clearly personal.

The Vella Case: How $1.2 Million in Company Money Became 18 Months in Prison

Vickie Anne Vella was a director of Coast Reo Pty Ltd and Midcoast Reinforcement Pty Ltd. Those companies traded as Newcastle Plastamasta, Central Coast Plastamasta, and Port Macquarie Plastamasta, supplying plasterboard and steel to the construction sector in coastal NSW.

As the sole signatory to the companies’ bank accounts, Vella had unfettered access to corporate funds. Between 4 August 2016 and 5 April 2018, she withdrew approximately $1,216,806 and used those funds on:

• Gambling
• Sequential cash withdrawals
• iTunes subscriptions
• Star City Hotel, Pyrmont (accommodation and entertainment)

The companies entered liquidation in 2018. ASIC investigated, referred the matter to the CDPP, and Vella pleaded guilty on 10 April 2026.

On 23 July 2026, the NSW District Court sentenced Vella to 18 months’ imprisonment, to be served by way of an Intensive Corrections Order. District Court Judge Smith specifically noted that general deterrence carried significant weight, as an explicit warning to other directors that apparent good character will not insulate them from serious consequences when they exploit their position.

“General deterrence carried significant weight in this matter to discourage those with apparent good character from taking advantage of the system.” District Court Judge Smith, sentencing Vickie Vella, 23 July 2026 (ASIC 26-169MR)

As a direct statutory consequence of her conviction, Vella is automatically disqualified from managing any corporation for five years, until 23 July 2031, under s 206B of the Corporations Act.

Automatic Disqualification: What Section 206B Means for Convicted Directors

Section 206B of the Corporations Act provides for automatic disqualification from managing corporations. No ASIC application is required. The disqualification takes effect by operation of law from the date of conviction.

A person is automatically disqualified if they are convicted of an offence that involves dishonesty and is punishable by imprisonment for at least 3 months, or a contravention of the Corporations Act punishable by imprisonment for more than 12 months. Section 184 convictions satisfy both limbs. The disqualification period is 5 years for domestic convictions.

What disqualification means in practice: A disqualified person cannot be a director, secretary, or take part in the management of any corporation, including a new company, a family trust company, or any other entity. Breaching a disqualification order is itself a criminal offence under s 206A, carrying up to 5 years’ imprisonment. Each day of non-compliance is a separate offence.

If you are a director who has been convicted, or who is facing ASIC investigation, you need urgent legal advice about the scope of the disqualification and what management activities are prohibited. Boss Lawyers’ director disputes team provides urgent advice in these situations.

Common Patterns ASIC and Liquidators Look For

The Vella case followed a pattern that ASIC investigators and liquidators recognise immediately. Understanding what triggers scrutiny is important for directors who want to ensure their conduct is defensible.

Red flags that attract investigation

• Director loan account balances growing without repayment: A director loan account (DLA) that increases year-on-year without a formal loan agreement or repayment schedule is one of the first things a liquidator examines. It frequently leads to demands for repayment and, in serious cases, investigation of whether the “loan” was ever genuine.
• Company credit cards used for personal expenses: Using a company card for personal travel, dining, accommodation, or retail, even occasionally, can constitute a misuse of position if it is dishonest and not properly authorised.
• Cash withdrawals with inadequate records: Sequential or round-number cash withdrawals from company accounts, without supporting receipts or business purpose records, are immediately suspicious in a liquidation examination.
• Related-party transactions at non-commercial terms: Paying a spouse’s business at inflated rates, or paying rent to a director-owned property at above-market rates, can constitute a misuse of company assets.
• Payments to family members not performing legitimate work: Salary or contractor payments to family members who are not actually working for the company are common ASIC investigation triggers.

The liquidator’s toolkit

When a company enters liquidation, the liquidator has extensive powers to investigate director conduct. These include:

• Section 596A examinations: The liquidator can compel the director to attend court and answer questions under oath about company affairs, property, and transactions.
• Section 596B examinations: Third parties, including accountants, bankers, and business associates, can also be compelled to give evidence.
• Section 530A (company books): Directors are required to deliver all company books and records to the liquidator on demand. Failure is a criminal offence.
• Voidable transaction claims: Unfair preferences (s 588FA), uncommercial transactions (s 588FB), and unreasonable director-related transactions (s 588FDA) can be recovered from the director personally.
• ASIC referral: Liquidators are required to report suspected criminal conduct to ASIC under s 533 of the Corporations Act. The Vella prosecution began with exactly this referral.

For more on the insolvency investigation process, see Boss Lawyers’ guide to insolvency and restructuring for directors.

What to Do If You Suspect a Co-Director Is Misappropriating Company Funds

If you are a director, shareholder, or business partner who suspects that company funds are being misused, the window for effective action is time-sensitive. Here is what the law gives you.

Step 1: Inspect company records immediately

Under s 198F of the Corporations Act, a director has the right to inspect company books. This is a right that cannot be unreasonably refused. If you are being denied access to financial records, bank statements, or the company’s accounting system, that refusal is itself a red flag and potentially grounds for urgent court action.

Step 2: Preserve what you can access

Download or copy bank statements, accounting records, and expense reports before access is restricted further. Courts look favourably on parties who act to preserve evidence; they look unfavourably on those who destroy or conceal it.

Step 3: Consider a freezing order

If there is a real risk that company assets are being dissipated or that a director is transferring funds out of reach, the court can grant a freezing order under UCPR r 260A on an urgent, without-notice basis. The threshold requires evidence of a legal or equitable right and a danger that the respondent will dissipate assets. Boss Lawyers regularly acts in freezing order applications in the Supreme Court of Queensland. These are time-critical and require experienced litigation support.

Step 4: Derivative action under section 236

Section 236 of the Corporations Act allows a member or former member to bring a proceeding on behalf of the company where it is in the company’s interests. If the board majority is controlled by the wrongdoing director and refuses to act, a minority shareholder can apply for leave under s 237 to bring the action themselves.

Step 5: Report to ASIC

ASIC accepts reports of suspected corporate misconduct. While ASIC does not investigate every complaint, reports of systematic misappropriation, particularly where a company has entered or is approaching insolvency, are taken seriously. Reports can be made at asic.gov.au.

5 Mistakes Directors Make That Escalate Civil Breaches Into Criminal Exposure

1. Treating the company as a personal ATM without records: Taking money from a company account is not automatically illegal if it is properly authorised and recorded. The problem arises when there is no board resolution, no loan agreement, no repayment, and no legitimate business purpose. The absence of records is itself evidence of dishonesty.
2. Relying on “the accountant did it” as a defence: Delegating accounting functions does not eliminate personal liability. If you signed off on financial statements you did not read, or approved expense reports without questioning them, the duty of care under s 180 requires more than passive reliance.
3. Continuing to draw on company funds during financial distress: When a company is approaching insolvency, drawing additional funds for personal use compounds every legal risk. The withdrawals are more likely to be recoverable by a liquidator as uncommercial transactions or fraudulent transfers, and the criminal exposure increases.
4. Resigning before the liquidation to avoid scrutiny: Resignation does not eliminate personal liability for conduct during your tenure as director. ASIC’s investigation of Vella began after the companies entered liquidation. Her resignation before that point did not assist her.
5. Ignoring early signs of investigation: An ASIC notice under s 19 (compulsory examination) or a liquidator’s letter seeking records is not a formality. These are the opening moves of a formal investigation. Legal advice should be obtained immediately on receipt. See Boss Lawyers’ guide on director dispute and liability advice.

How Boss Lawyers Can Help

Boss Lawyers is a commercial litigation and insolvency firm based in Brisbane CBD. Mark Harley, Principal Solicitor, is recommended by the Doyle’s Guide for Commercial Litigation and has over 17 years of experience acting for directors, shareholders, and creditors in complex corporate disputes.

We regularly act for:

• Directors under investigation advising on ASIC notices, s 596A examinations, and cooperation strategies that protect your interests
• Directors facing disqualification advising on s 206B consequences and the scope of prohibited management activities
• Co-directors and shareholders who suspect misappropriation, for urgent applications for freezing orders, derivative actions, and book inspection rights
• Creditors of collapsed companies investigating director conduct and recovering funds through voidable transaction claims and ASIC reports
• Directors with DLA exposure advising on Division 7A compliance and liquidator demand responses

If you are facing a situation involving company funds and director conduct, call Mark Harley on 1300 267 711 for a consultation. The earlier you act, the more options are available to you.

Frequently Asked Questions

Is it illegal to use company money for personal expenses?

Yes, if done dishonestly. Using company money for personal expenses with the intention of gaining a personal advantage or causing detriment to the company is a criminal offence under s 184(2)(a) of the Corporations Act 2001 (Cth), carrying up to 15 years’ imprisonment (for offences after 1 March 2019) and 4,500 penalty units. Even where personal drawings are authorised, they must be properly documented. Undocumented withdrawals are a serious red flag for liquidators and ASIC investigators.

What is the automatic disqualification period for a director convicted under section 184?

Under s 206B of the Corporations Act, a conviction under s 184 triggers an automatic 5-year disqualification from managing any corporation in Australia. The disqualification takes effect from the date of conviction. No separate ASIC application is required. Breaching the disqualification is itself a criminal offence under s 206A.

Can a liquidator recover money a director took from the company for personal use?

Yes. A liquidator can recover misappropriated funds through several mechanisms: as an uncommercial transaction (s 588FB Corporations Act) if the company received no commercial benefit from the payment; as an unreasonable director-related transaction (s 588FDA) where a director received a benefit the company would not have given at arm’s length; or through a direct claim for breach of director duties. The liquidator can also bring criminal evidence to ASIC under the s 533 reporting obligation, which can trigger a CDPP prosecution as occurred in the Vella case.

What should I do if I suspect my co-director is using company funds for personal purposes?

Act quickly. You have the right to inspect company books under s 198F of the Corporations Act. If access is denied, or if you believe funds are at immediate risk of dissipation, an urgent freezing order application under UCPR r 260A (Queensland) can be made to the Supreme Court on short notice. You should document everything you know and obtain legal advice before confronting the other director or taking unilateral action. Mishandled confrontations can complicate both the legal proceedings and any subsequent ASIC investigation.

Does it matter if the company was ultimately profitable when the director was taking money?

No. The s 184(2)(a) offence does not require that the company suffer a net loss. The test is whether the director used their position dishonestly with intent to gain a personal advantage or cause detriment. The company’s overall financial performance at the time of the withdrawals is irrelevant to the criminal threshold, though it may influence sentencing.

Author: Mark Harley, Principal Solicitor, Boss Lawyers. Mark is recommended by the Doyle’s Guide for Commercial Litigation in Queensland and has over 17 years of experience advising directors, shareholders, and creditors in complex commercial and insolvency disputes. Boss Lawyers is based in Brisbane CBD and regularly acts in director disputes, insolvency matters, and urgent commercial litigation across Queensland.

This is general information only and is not legal advice. You should obtain professional advice specific to your circumstances.