AUSTRALIAN RESIDENT DIRECTOR SERVICES
Is it essential to have a resident director?
Yes. The Corporations Act requires that every Australian private (or "Pty Ltd") company must have at least one director who “ordinarily resides in Australia”.
Public companies must have at least 2 Australian resident directors.
If you want to know if a person qualifies as a resident director, contact us.
Only Australian residents qualify
Who can be your resident director?
With some exceptions, anyone over the age of 18 who is a permanent resident of Australia can be a resident director.
But very few people are prepared to take the risk unless they are a professional resident director.
This is because directors in Australia are personally liable for many company debts.
Also, a director who does not comply with the law relating to director duties can be charged with a criminal offence with a penalty of $200,000 and/or imprisonment for up to 5 years!
Who should be your resident director?
Most people do not want to expose a relative or friend to the risk.
Also, it is not a good idea to use an employee, even if he/she has experience as a director. We are sometimes asked to supply a director to take over from an employee-director who has done the wrong thing, including embezzling money.
Therefore, you will probably have to pay someone to be your resident director. So, it is a good idea to find a director who can add value, not just fulfil the legal requirement.
How are you protected when you appoint a director you don’t know?
The legal protection
Make sure that anyone you are thinking of using as a resident director has a comprehensive resident director agreement which sets out all the details of the arrangement and provides you with the necessary legal protection.
The practical protection
One of the advantages of using a lawyer as your resident director is that you get an extra layer of protection – not just the protection of a detailed agreement. This is because a lawyer who does the wrong thing can lose his/her registration to practise law ... a big deterrent!
There are other practical ways to ensure you are protected which we can explain to you.
... by appointing the right resident director
Why use our Australian resident director service?
We can handle, or arrange, everything which needs to be done to set up a new business in Australia. Furthermore, we have an advantage over our competitors – we can provide a director who not only has a lot of company director experience but also has both legal and business experience, a significant benefit for many companies.
For example, our free legal alert service helps you identify, and avoid, potential legal problems which often arise in the process of setting up business in a new country, which can otherwise be very costly.
There is one other major reason why you should consider using us. We include additional services in our normal resident director fee without additional charge – see below.
Our competitors can't, or don't, provide all these services
What is included free of charge?
The following services are included in our normal resident director fee without further charge:
- Our law firm provides free legal advice about setting up a company here.
- We provide documentation which you will need for compliance purposes e.g. pro forma circulating directors' resolutions to avoid the need for formal meetings.
- Our legal alert service (based on information you provide about your business activities and plans) can help you avoid costly problems.
- You can use our office as the official address for your registered office – no charge.
- We will explain how to overcome some of the hurdles and delays in setting up a business e.g. how to obtain an ABN, which is necessary before you can commence business, without waiting 2-3 months which it normally takes if there is a non-resident director or shareholder.
- We will be your ASIC registered agent and renew your ASIC registration each year (although you will have to pay the ASIC review fee).
- We will handle mail received from government bodies such as the tax office and ASIC i.e. it will be scanned and emailed to you.
- We have a detailed resident director agreement which provides protection for you and sets out what needs to be done.
What does our resident director service cost?
Because of the personal liability involved, the resident director fee depends on the risk, which varies from one company to another. This means we need some information about the business you propose to set up in Australia so we can assess the risk.
Therefore, if you would like a quotation or just more information, please contact us. We will answer any questions you have and send you some further information.
What companies say about our resident director service
"Russell Wheeler has done an excellent job as our resident director. He deals with everything professionally and quickly. We have no hesitation in recommending him as a director to anyone who wants to establish a business/company in Australia"
Peter Siu Kit Ng, Managing Director, Guang Yi Company Ltd, Hong Kong
"Russell is very practical and in my opinion this, combined with his experience in business law, makes him a great asset to any company which appoints in as its resident director. I am very happy to recommend Russell highly to anyone who is looking for a company director in Australia".
Neal Macrossan, Managing Director, Incorporator.com.au, Australia
“Russell is a very professional company director and is a real pleasure to work with. I can wholeheartedly recommend him for the role of resident director.”
Patrick Coleman, CEO, PAYG, England
Resident director, Russell Wheeler
Free advice relating to starting a business in Australia
In addition to providing free advice relating to the registration of a company in Australia, we are also happy to provide free advice for our clients about some important aspects of starting a business here.
For example, most people think that registering a company name gives them exclusive rights to that name. That's not correct – it does not stop someone else using the same name as a brand name or to describe a product or service. This requires a further step which we are happy to explain to you.
Traps for new businesses in Australia
Just like anywhere, the potential pitfalls vary from industry to industry. But, in our experience, there is one problem which is very common and affects lots of businesses in Australia in many different industries – misunderstandings which often lead to a claim of misleading and deceptive conduct.
It is not uncommon for such a claim to end in court or in a consumer trading tribunal.
This does not only apply to companies in their dealings with consumers. The same problem affects business-to-business transactions.
The good news is that these problems can usually be avoided by having the appropriate documentation in place from the beginning.
Obligations and risks of being a director
All company directors in Australia must:
- act honestly and exercise care/diligence
- know what the company is doing at all times
- make sure that the company can pay its debts on time
- make sure the company keeps proper financial records
- act in the best interests of the company, not their own interests
- not use any information to obtain a personal financial advantage
- disclose any potential conflict of interest at a directors’ meeting
- make enquiries of employees and other directors to assess how the company’s actions and plans may affect its business performance; this may require external professional advice.
A director who fails to perform his/her duties may be guilty of a criminal offence with a penalty of $200,000 or imprisonment for up to 5 years, or both.
Some other risks faced by a director in Australia are:
- directors are personally responsible for the payment of tax on wages payable to employees
- directors are also personally responsible for the payment of superannuation to employees
- if the company is not able to pay invoices on time, directors can be held personally liable for any debts incurred
Exceptions - who cannot be a director
You cannot be a director, or even manage a company, without the consent of a court if you:
- are an undischarged bankrupt
- have entered into an agreement with creditors which has not been complied with
- have been convicted of certain offences (including fraud and offences under company law such as breaching directors' duties or allowing a company to trade when it cannot pay invoices on time)