Australian company directors face a significantly changed compliance landscape in 2026. Three major reforms — mandatory sustainability reporting, a new mandatory merger control regime, and digital asset licensing — have reshaped director obligations under the Corporations Act 2001 (Cth). Understanding these changes is not optional. Directors who fail to comply face personal civil liability, regulatory penalties, and in serious cases, criminal exposure.
This guide explains what changed, who is affected, and what Queensland directors should prioritise now.
1. Mandatory Sustainability and Climate Reporting
Australia’s mandatory climate-related financial disclosure framework — established by the Treasury Laws Amendment (Financial Market Infrastructure and Other Measures) Act 2024 — requires large entities to disclose material climate-related risks and opportunities in their annual reports, using the new Australian Sustainability Reporting Standards (ASRS 1 and ASRS 2). These standards align with the International Sustainability Standards Board (ISSB) framework.
Who Is Affected — The Phased Rollout
The regime applies in three groups based on entity size:
| Group | Criteria (meet 2 of 3) | Reporting From |
|---|---|---|
| Group 1 | Revenue >$500M; OR assets >$1B; OR >500 employees — plus ASX 100 / APRA-regulated entities | FY commencing on or after 1 January 2025 |
| Group 2 | Revenue >$200M; OR assets >$500M; OR >500 employees | FY commencing on or after 1 January 2026 |
| Group 3 | Revenue >$50M; OR assets >$25M; OR >100 employees | FY commencing on or after 1 January 2027 |
What Must Be Disclosed
- The board’s governance arrangements for climate-related risks and opportunities
- The entity’s strategy and plans for managing climate impacts on the business
- Risk management processes for identifying, assessing, and managing climate risk
- Metrics and targets — including Scope 1, 2, and (where material) Scope 3 greenhouse gas emissions
Director Liability Under the New Framework
Directors are personally responsible for ensuring the entity’s sustainability report is prepared and complies with the ASRS standards. A failure to prepare a required sustainability report — or preparing one that is materially misleading — can expose directors to civil penalty liability under the Corporations Act. This is not a compliance function that can be delegated away from the board.
For Queensland directors of Group 2 entities (companies with revenue above $200M, assets above $500M, or more than 500 employees): your first mandatory sustainability report applies to the financial year commencing on or after 1 January 2026. Governance frameworks, data collection processes, and board oversight structures need to be in place now — not at year-end.
2. Mandatory Merger Control — A Complete Overhaul from 1 January 2026
The Treasury Laws Amendment (Mergers and Acquisitions Reform) Act 2024 replaced Australia’s previous voluntary, informal merger clearance process with a mandatory pre-merger notification regime, administered by the Australian Competition and Consumer Commission (ACCC). This change came into effect on 1 January 2026 and represents the most significant reform to merger law in decades.
What Changed
Under the old regime, businesses could voluntarily seek informal ACCC clearance before completing an acquisition — but were not legally required to do so. The new regime requires mandatory notification for acquisitions meeting specified thresholds, and prohibits completion of a notifiable acquisition without ACCC clearance or a no-review decision.
Notification Thresholds
An acquisition is notifiable if it meets both a market threshold and a transaction threshold:
- Market threshold: The combined Australian revenue of the acquirer and target exceeds $200 million (or globally exceeds $500 million); OR the target has Australian revenue of at least $10 million
- Transaction threshold: The transaction value exceeds $35 million; OR the acquirer has Australian revenue exceeding $200 million
Additional rules apply for serial acquisitions, creeping acquisitions, and acquisitions in concentrated markets. The ACCC has also published guidance on how it will assess the competitive effects of acquisitions — directors and their M&A advisers need to be across this guidance before signing binding agreements.
Consequences of Non-Compliance
Completing a notifiable acquisition without ACCC clearance can result in:
- Substantial civil penalties (up to the greater of $50 million, three times the benefit obtained, or 30% of annual Australian turnover)
- Divestiture orders requiring the acquirer to sell the acquired business or assets
- Injunctions restraining the completion or requiring unwinding of the transaction
What This Means for Queensland Directors in 2026
If your company is considering any acquisition in 2026 — whether buying a competitor, acquiring a supplier, or entering a joint venture — you must assess mandatory notification requirements before signing any binding terms. Notification timelines can extend from 6 to 12 weeks, and this must be factored into transaction timelines and conditions precedent.
3. Digital Asset Services — AFSL Requirements from 1 March 2026
Under the Treasury Laws Amendment (Digital Asset Services) Bill 2025 — passed in late 2025 — entities carrying on a business of providing digital asset services in Australia are required to hold an Australian Financial Services Licence (AFSL) from 1 March 2026.
Who This Affects
- Cryptocurrency exchanges and digital asset trading platforms with Australian users
- Businesses facilitating the buying, selling, or exchange of digital assets on behalf of others
- Entities offering staking products, yield products, or digital asset custody services to Australian retail or wholesale clients
Director Exposure
Directors of entities operating without an AFSL from 1 March 2026 face civil penalties of up to 2,000 penalty units ($660,000 at the current rate of $330 per unit as at October 2024) and potential criminal liability for reckless or intentional unlicensed operation. As with other regulated industries, directors cannot avoid personal liability by claiming they relied on management — the obligation sits at board level.
How These Changes Interact With Existing Director Duties
These three reforms do not replace the existing director duties framework under sections 180–184 of the Corporations Act. They add to it. Directors already owe duties of care and diligence (s 180), good faith in the company’s best interests (s 181), and proper use of position and information (ss 182–183).
The 2026 changes create specific, non-delegable reporting and notification obligations that sit alongside these general duties. A director who fails to ensure mandatory sustainability reporting occurs, or who approves an acquisition without checking ACCC notification requirements, may simultaneously breach the specific 2026 obligations and the s 180 duty of care — particularly if the failure causes financial harm to the company through regulatory penalties, transaction delays, or shareholder loss.
For a deeper analysis of how director duties apply in practice, see our guide to director duties under ss 180–184 of the Corporations Act and our recent analysis of the ASIC v Bekier decision and what it means for Queensland directors.
Five Action Points for Queensland Directors Right Now
- Identify your sustainability reporting group. Use the Group 1/2/3 thresholds above to determine when your obligations start. If you are in Group 2, reporting for FY2025-26 is live now — your governance framework must be in place.
- Map your M&A pipeline against the new ACCC thresholds. Any acquisition planned for 2026 that meets the notification thresholds must factor in ACCC clearance timelines. Build this into your transaction conditions.
- Audit your digital asset exposures. If your business generates any revenue from digital asset-related services to Australian clients, assess AFSL requirements immediately. The 1 March 2026 deadline has already passed — if you are operating without a licence, seek advice today.
- Minute your board’s compliance oversight. For each of these reforms, directors need documented evidence of board-level consideration and oversight. “We relied on management” is not a defence to personal liability. Board minutes, resolutions, and documented advice trails are your protection.
- Get advice specific to your circumstances. These reforms apply differently across entity types, industries, and ownership structures. A pharmaceutical company, a construction group, and a technology startup all face different compliance profiles. General information is not a substitute for tailored legal advice.
Frequently Asked Questions
Does the mandatory sustainability reporting regime apply to all Queensland companies?
No. The regime applies in phases based on entity size. Small and medium Queensland businesses are not required to report under the current framework. Group 1 entities (largest listed and APRA-regulated) began reporting from FY2024-25. Group 2 entities (meeting 2 of the 3 revenue/asset/employee thresholds) report from FY2025-26. Group 3 entities report from FY2026-27. Check your entity’s size against the thresholds to determine when your obligations commence.
Does the new ACCC merger notification requirement apply to small business acquisitions?
Generally no. The mandatory notification thresholds require transaction values above $35 million (or acquirer revenue above $200M) and combined market revenue above $200 million. Acquisitions below these thresholds are not subject to mandatory notification. However, the ACCC retains the ability to investigate any acquisition, and voluntary notification remains available. Verify your specific transaction against the thresholds with legal advice before proceeding.
Our company completed an acquisition in early 2026. Do we need ACCC clearance retrospectively?
If the acquisition was completed on or after 1 January 2026 and met the mandatory notification thresholds, seek legal advice immediately. The ACCC has investigative powers over transactions completed without required notification. The consequences — civil penalties, divestiture orders — are severe. Acting promptly to obtain advice and, where appropriate, engaging proactively with the ACCC will be far less costly than waiting for regulatory action.
Can a director be personally liable for a company’s failure to prepare a sustainability report?
Yes. Directors are responsible under the Corporations Act for ensuring the entity complies with its reporting obligations. A knowing or reckless failure to comply can attract civil penalties. In addition, where non-compliance results in financial harm to the company (for example, through regulatory fines or reputational damage), a director’s failure to ensure compliance may constitute a breach of the s 180 duty of care and diligence.
What is the penalty unit value for digital asset and Corporations Act civil penalties?
The Commonwealth penalty unit is currently $330 (as at October 2024, following the Crimes and Other Legislation Amendment (Omnibus No. 1) Act 2024, Royal Assent 24 October 2024). A maximum penalty of 2,000 penalty units = $660,000 per contravention. Maximum civil penalties for merger control breaches are set at the greater of $50 million, three times the benefit obtained, or 30% of Australian annual turnover.
Related Reading
If you are a Queensland director navigating the 2026 Corporations Act changes, the team at Boss Lawyers’ director disputes practice can provide tailored legal advice. We also regularly advise on commercial litigation matters arising from corporate governance disputes. Call Mark Harley directly on 1300 267 711 or contact us online.
This is general information only and is not legal advice. You should obtain professional advice specific to your circumstances.
Mark Harley is the Principal Solicitor at Boss Lawyers Pty Ltd. With over 17 years of experience in commercial litigation and corporate disputes in Queensland and nationally, Mark regularly advises directors on regulatory compliance, governance obligations, and corporate disputes. Doyle’s Guide Recommended Practitioner 2026 (Commercial Litigation, Queensland). Boss Lawyers: Level 27, Santos Place, 32 Turbot Street, Brisbane QLD 4000. Phone: 1300 267 711.
