When are you a director when you're not a director? The law of de facto directors

Abstract

Significant duties are imposed upon company directors pursuant the Corporations Act 2001 (Cth) . However, frequently parties who are not properly appointed directors effectively run companies. These parties are de facto directors, and as such, are subject to the significant statutory duties imposed upon directors. This article provides a detailed examination of the law relating to de facto directors. Notwithstanding that there have been numerous cases concerning de facto directors, there remains considerable confusion regarding the term de facto director. There is a clear paucity of literature on this topic. This article sets out to clarify the ambit of the statutory definition of de facto director by examining a number of contentious issues concerning the elements required to satisfy the statutory definition. The article also reviews the position of a range of parties who may be at risk of being caught by the statutory definition and highlights the contrasting approaches taken by different courts.