UNDERSTANDING EXCLUDED CORPORATIONS
Introduction
Can a business sue for defamation in Australia? Yes — businesses can pursue defamation claims where false statements of fact are published about them that cause, or are likely to cause, serious harm to their reputation or commercial interests.
As discussed in our previous article, What is Defamation, the concept of reputation has been valued since ancient times. Reputation is deeply personal and intrinsically tied to every individual. Over time, humanity created other entities—known in law as corporeal bodies—such as companies or corporations.
A company exists as a legal entity under the Corporations Act 2001 (Cth). One common question we receive is: Can a company sue for defamation?
The answer is yes, but only if it qualifies as an excluded corporation under the law.
What Are Excluded Corporations?
According to Section 9 of the Defamation Act 2005 (Vic):
A corporation has no cause of action for defamation unless it was an excluded corporation at the time of publication.
A corporation is an excluded corporation if either:
- Its objects do not include obtaining financial gain for members (e.g., religious organizations, charities), or
- It has fewer than 10 full-time equivalent employees and is not associated with another corporation.
1. Corporations Formed Without Profit Motive
These include entities like charities or religious organizations that operate not for profit. Even if such organizations employ more than 10 employees, they may still qualify as excluded corporations—unlike typical profit-driven businesses.
2. Corporations with Fewer than 10 Employees
Corporations with fewer than 10 full-time equivalent (FTE) employees also qualify. Courts may count exclusive contractors as employees in this calculation. For example, a company with part-time staff equating to fewer than 10 FTEs still has standing to sue.
Final Comments
Determining excluded corporation status isn’t always straightforward. It typically requires:
- Careful legal analysis
- Document review
- Expert advice from defamation lawyers
Generally, large, profit-driven corporations cannot sue under defamation laws in Victoria and similarly in other jurisdictions.
If you’ve experienced defamation—especially through online reviews—and it has harmed your business, Allen Law can help.
Phone: (03) 7020 6563
Email: enquiries@allenlawyers.com.au
Website: www.allenlawyers.com.auDisclaimer: This article is general in nature and does not constitute legal advice. Please contact Allen Law for advice tailored to your particular situation.
