The defence under s 222AOJ(3) of the Income Tax Assessment Act 1936 (Cth) requires an objective assessment of reasonableness: a director must prove that he or she took all steps which were reasonable having regard to circumstances of which the director, acting reasonably, knew or ought to have known. A director's personal ignorance of the law or of facts which ought to have been known does not assist in establishing the defence. A single director facing uncooperative co-directors may be expected to have sought professional advice and to have taken steps to cause the company to begin to be wound up.
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