ASIC has made no secret of its intentions in 2026: more investigations, more actions, stronger outcomes. If you are a director of a Queensland company, you need to understand what ASIC is targeting — and what it means for your personal liability.
This is general information only and is not legal advice. You should obtain professional advice specific to your circumstances.
ASIC’s Enforcement Trajectory: A Step Change
In late 2025, ASIC announced its 2026 enforcement priorities, signalling a clear continuation — and acceleration — of its enforcement momentum. The Deputy Chair was explicit: ASIC has delivered “more investigations, more actions and stronger outcomes” in recent years, and the doubling of new investigations in 2025 is set to continue.
For Queensland business owners and company directors, this is not background noise. ASIC’s enforcement reach extends to every director of every company registered under the Corporations Act — including small and medium-sized private companies that may have assumed they were below ASIC’s radar.
ASIC’s Key 2026 Enforcement Priorities
ASIC’s 2026 priorities fall into several key areas directly relevant to Queensland company directors:
1. Directors’ Duties and Corporate Governance Failures
Directors’ duties under sections 180–184 of the Corporations Act remain a core ASIC enforcement target. ASIC has consistently pursued directors who:
- Fail to exercise care and diligence (s 180) — the reasonable director standard
- Fail to act in good faith in the best interests of the company (s 181)
- Improperly use their position or information for personal gain (ss 182–183)
- Engage in conduct with the intention of deceiving or defrauding shareholders or creditors (s 184)
In the March 2026 quarter alone, ASIC took enforcement action against 69 parties for corporate governance misconduct. This is not a regulator making occasional examples — it is systematic, sustained enforcement across the corporate spectrum.
The practical implication: if you are on a board — even a small private company — you must understand and actively discharge your duties. “I didn’t know” is rarely an effective defence. Directors are expected to make inquiries, attend meetings, review financial statements, and push back when something doesn’t look right.
2. Insolvent Trading
Insolvent trading — allowing a company to incur debts when it is insolvent — remains an enduring ASIC priority. Section 588G of the Corporations Act imposes personal liability on directors for debts incurred while the company was insolvent, if the director was aware or ought to have been aware of the insolvency.
The warning signs ASIC looks for include:
- Failure to pay suppliers, employees, or the ATO on time
- Overdue tax obligations (particularly GST and PAYG withholding)
- Creditors issuing statutory demands or threatening legal action
- Financial statements showing net current liability positions
- Directors’ loan accounts in debit (the company owes the director money, reducing available assets)
A liquidator appointed to a company in financial difficulty has a statutory obligation to investigate and report potential insolvent trading. ASIC then assesses whether to take civil or criminal action. The consequences can include compensation orders, pecuniary penalties, and disqualification from managing companies.
3. Phoenix Activity
ASIC, in partnership with the ATO, continues to target illegal phoenix activity — where directors wind up an insolvent company and transfer its business to a new entity to avoid paying creditors, employees, and tax debts. Changes introduced by the Treasury Laws Amendment (Combating Illegal Phoenixing) Act 2020 gave ASIC and liquidators stronger powers to pursue phoenix operators.
Directors who have transferred business assets to related entities at less than market value in the lead-up to insolvency face significant legal exposure. These transactions can be unwound by a liquidator and ASIC can seek civil penalties and disqualification.
4. Director Disqualification
ASIC regularly applies to disqualify directors who have been involved in multiple failed companies. Under section 206F of the Corporations Act, ASIC can seek an order disqualifying a director if they have been an officer of two or more companies that have been wound up and the director has not properly fulfilled their obligations.
Disqualification is a severe consequence. It prevents the director from managing any company (incorporated in Australia or overseas) for the period of disqualification. Breaching a disqualification order is a criminal offence.
5. Fundraising Breaches
ASIC is also targeting companies that raise capital from investors without proper disclosure — particularly through online platforms and social media. Directors of companies that issue securities or interests without a compliant prospectus or product disclosure statement face significant penalties. Recent ASIC action has resulted in individual directors being fined millions of dollars for fundraising breaches.
What This Means for Queensland Directors in Practice
For directors of Queensland companies — particularly SME directors who may not have formal governance frameworks in place — ASIC’s stepped-up enforcement requires a practical response:
Keep proper financial records
Section 286 of the Corporations Act requires companies to keep written financial records that correctly record and explain the company’s transactions, financial position, and performance. A failure to keep proper records makes it much harder to defend against insolvent trading or other claims — and can itself be an offence.
Get financial statements on a regular basis
Directors cannot discharge their duty of care and diligence without access to current financial information. Annual financials alone are insufficient for companies under financial pressure. Monthly management accounts — cash flow statements, profit and loss, and balance sheet — are the minimum for most SMEs. If you do not understand what the financial statements are telling you, ask. Ask your accountant. Ask your lawyer. Ask your co-directors.
Act on warning signs early
The safe harbour provisions under section 588GA of the Corporations Act can protect directors from insolvent trading liability if they are genuinely pursuing a course of action that is reasonably likely to lead to a better outcome than immediate administration or liquidation. But safe harbour requires proactive, documented steps — not passive hope.
If your company is showing signs of financial stress, seek legal and financial advice immediately. The earlier you act, the more options are available — including voluntary administration, small business restructuring, or negotiated arrangements with creditors.
Document board decisions
If your company faces a dispute or regulatory scrutiny, the board minutes and resolutions are the primary record of what directors knew and when. Ensure board meetings are held regularly, decisions are formally documented, and dissenting views are recorded. A director who objected to a decision at the time is in a fundamentally different position to one who simply went along with it.
Understand your personal exposure before signing a guarantee
Many Queensland SME directors sign personal guarantees for company leases, finance arrangements, and supplier accounts without fully understanding the consequences. A personal guarantee converts what was a corporate liability into a personal one. If the company fails, the guarantee holder can pursue you personally.
Before signing any guarantee, get legal advice. Before your company’s creditors seek to enforce a guarantee, get legal advice immediately — there may be defences available, or the guarantee may be able to be negotiated.
Director Liability in a Rising Insolvency Environment
Queensland is experiencing a significant increase in corporate insolvencies in 2026. Rising interest rates, construction sector stress, ATO debt enforcement resuming after COVID-era forbearance, and supply chain pressures have combined to push many businesses into distress.
As insolvency numbers rise, so too does the number of liquidator investigations — and, in turn, ASIC referrals and enforcement actions. The current environment means that directors of struggling businesses face a higher risk of regulatory scrutiny than at any point in recent years.
This is not a reason to panic. It is a reason to take your directorial responsibilities seriously, to keep proper records, to act on financial warning signs early, and to get professional advice when the warning signs appear.
Boss Lawyers: Protecting Queensland Directors
Boss Lawyers regularly advises directors who are facing regulatory scrutiny, potential insolvent trading claims, or disputes with shareholders and co-directors. We understand the commercial and personal pressures that directors of Queensland SMEs face, and we provide clear, practical advice that helps you make informed decisions — not just legally correct ones.
If you are concerned about your obligations as a director, or your company is showing signs of financial stress, contact Boss Lawyers for a confidential consultation. Early advice is almost always better than late advice.
Call us on 1300 267 711 or enquire online.
See also: Director Disputes | Insolvency Lawyers Brisbane
