Australia's Department of the Treasury launches consultation on reforms to curb financial abuse through coerced company directorships

Australia's Department of the Treasury has published a consultation paper seeking feedback on policy options to reduce the prevalence and impact of coerced directorships, where perpetrators misuse company directorships to create debts and liabilities as a form of coercive control. The proposals focus on strengthening safeguards in corporate registration and governance settings and aligning relief mechanisms across the Corporations Act 2001 and the Taxation Administration Act 1953. Options for discussion include strengthening director appointment consent requirements and improving pathways for removal and resignation, including expanding Australian Securities and Investments Commission powers to remove non-consenting directors and, in some cases, deregister or wind up companies that lack directors appointed with adequate evidence of consent. Treasury also canvasses expanding or creating defences for insolvency-related directors’ duties and for director penalty notices so that experiencing coercive control can constitute a recognised basis for non-participation in management, supported by a consistent statutory definition of “coercive control” across tax and corporate law. Further measures include improving how coerced directors can alert the Australian Taxation Office to their circumstances and extending timeframes to seek remission of, or raise defences to, director penalty notices, alongside potential strengthened penalties and disqualification consequences for perpetrators and intermediaries who facilitate coerced or fraudulent appointments. Submissions close on 24 December 2025, with Treasury noting the options have not received Government approval and are not yet law.