Criminal Records and Eligibility to Run a Business in Australia

Running a business is a huge responsibility and, under Australian law, certain individuals with a criminal record are not allowed to assume such a position. These restrictions are however time-limited and after a certain period of time, a person can redeem itself and will be able to hold a top management position. Here are the main reasons why a person is barred from running a business.

Criminal record

Offences under the Corporations Act

People who have committed offences that fall under the Corporations Act of 2001 are automatically banned from running a business in Australia. The Corporations Act was established under the Commonwealth of Australia and is the fundamental law for business operations in the country.

There are various offences that disqualify a person from holding a top management job:

  • Any type of act that affected a company’s financial stability, such as fraud or embezzlement.
  • Any act that goes against the Corporations Act and is punishable by more than 12 months of imprisonment.
  • Any act involving dishonesty in a management position that is punishable by more than three months of imprisonment.
  • Any act that contravenes the business laws of another country and is punishable by more than 12 months of imprisonment. 

Bottom line, a person who fell foul of the Corporations Act while in a management position will naturally be barred from holding a similar job as there is a very high risk they will repeat the offence.

Serial bankruptcy

Another reason an individual might be barred from running a business is being involved in two or more companies going bankrupt over the past seven years. This is a very common type of financial fraud and once a pattern of running a business into insolvency was established, that person will be stopped from using the same scheme over and over. 

Can you register a business name with a criminal record?

The same rules apply when it comes to registering a business name under the Business Names Registration Act. The rationale is pretty obvious. Once you’ve committed gross acts of fraud while running a business and got caught, you cannot be allowed to start all over again under a different name.

When will the interdiction be lifted?

A person wanting to assume a top managing position will have to undergo a background check like a national character criminal record check and will be ineligible for that position if they were previously convicted of any of the offences mentioned above.

However, that does not mean they will never be able to be in the business world ever again. There are two situations that can apply.

  • If a person was found guilty of an offence under the Corporations Act but was not sentenced to any prison term they will be barred from running a business for a period of five years starting from the moment they were convicted in a court of law.
  • On the other hand, if a person was sentenced to a prison term, the five-year waiting period starts from the moment they were released.

Once the waiting period is over, an individual will once again be allowed to run a business and register a new business name