Document ID: chunk:federal_register_of_legislation:C2004C01070:clause:1_197
Version: federal_register_of_legislation:C2004C01070
Segment Type: clause
Provision Reference: sch 1 cl 197
Character Range: 30022–31059

197  Directors liable for debts and other obligations incurred by corporation as trustee

 (1) A person who is a director of a corporation when it incurs a liability while acting, or purporting to act, as trustee, is liable to discharge the whole or a part of the liability if the corporation:
 (a) has not, and cannot, discharge the liability or that part of it; and
 (b) is not entitled to be fully indemnified against the liability out of trust assets.
This is so even if the trust does not have enough assets to indemnify the trustee. The person is liable both individually and jointly with the corporation and anyone else who is liable under this subsection.

 (2) The person is not liable under subsection (1) if the person would be entitled to have been fully indemnified by 1 of the other directors against the liability had all the directors of the corporation been trustees when the liability was incurred.

 (3) This section does not apply to a liability incurred outside Australia by a foreign company.

Division 4—Powers