Join our investing community

ALERT! New reason to consider asset protection!

Discussion in 'Accounting, Tax & Legal' started by Nigel Ward, 15th Mar, 2007.

  1. Nigel Ward

    Nigel Ward Team InvestEd

    Joined:
    10th Jun, 2005
    Posts:
    1,172
    If you thought that because you were just a humble wage or salary earning employee you didn't need to consider asset protection - well think again!

    The High Court has recently determined in a unanimous decision that employees can be individually liable for misleading conduct in which they engage, even though it was done in the course of their employment and on behalf of their employer (see Houghton v Arms [2006] HCA 59).

    It used to be the law that an employee acting within the scope of his or her authority was not liable and the employer company was solely responsible for damages resulting from the wrongdoing.

    I'll post some more about this in due course, but in the interim be aware that a whole new avenue of potential liability has been opened up. It's too early to tell whether there will be a legislative response to close the window, but this decision represents yet another reason why all investors who are also employees need to seriously consider structuring their investments for asset protection.

    Cheers
    N.
     
  2. MrDarcy

    MrDarcy Well-Known Member

    Joined:
    13th Sep, 2005
    Posts:
    283
    Location:
    Sydney
    Thanks Nigel,

    Now we should all go out and setup HDT trusts, that will fix it :D
     
  3. Nigel Ward

    Nigel Ward Team InvestEd

    Joined:
    10th Jun, 2005
    Posts:
    1,172
    Cheeky! :)

    No. But we should all think about appropriate investment holding structures...

    Cheers
    N.