A recent decision of the Administrative Appeals Tribunal highlighted the need for companies to keep proper records. In the case of Guss and Australian Securities and Investments Commission [2006] AATA 401 (9 May 2006) http://www.austlii.edu.au/au/cases/cth/aat/2006/401.htm
The applicant was disqualified from managing corporations for a period of 5 years.
In the section "WHETHER DISQUALIFICATION IS JUSTIFIED" the primary reson given by the Tribunal is...
"46. The liquidators' s 533(1) reports in relation to the 6 companies contain a recurring theme, namely that in each case the books of account, or such books as were made available to the liquidators, fell short of the requirements of the Act [s.268 of the Corporations Act 2001]. The keeping of complete and accurate records of a company's affairs is a fundamental requirement to underpin sound management and in this regard the applicant's conduct in relation to multiple corporations over an extended period of time demonstrates either an inability, or an unwillingness, to comply with his obligations. It is all very well to claim, as the applicant did at the hearing before the ASIC delegate, that he had computer software problems, but if this is so, it does not explain why proper records in some other form were not kept. The applicant's persistent failure to comply with the statutory requirements in relation to maintaining books of account justifies the imposition of a period of disqualification from managing corporations."
