Resigning or removing a company director
Generally, when you resign, retire or are removed as a director of an Australian company, many of your legal obligations and requirements also cease. However, you may still be liable for your conduct when you were a director.
It is important that you follow the formalities for resigning as a director to ensure you are no longer named as a director on the record. On this page we explain the different ways you can resign as a director and the changes to director resignations to combat illegal phoenixing.
- Follow the company鈥檚 constitution or replaceable rules
- Notify ob体育 of the resignation or removal of a company director
- Changes to director resignations to combat illegal phoenixing
Follow the company鈥檚 constitution or replaceable rules
How you resign as a director of a company depends on how your company is governed 鈥� for example, whether the company has its own constitution, if it has adopted the replaceable rules under the听Corporations Act,听or if it is using a combination of both to manage its internal relationships and operations.
Replaceable rules are a basic set of rules for managing your company. If a company doesn鈥檛 have a constitution, it can use the replaceable rules instead. If a company uses the replaceable rules, it does not need to have a written constitution and won鈥檛 have the expense of keeping it updated as the law changes.
If a company has a written constitution, it must keep a copy as part of the company's records. See听constitution and replaceable rules听for more information.
Whichever rules are adopted by the company, you should follow the procedure set out in those rules to resign your position as a company director.
Resigning or removing a director using replaceable rules
If you use the replaceable rules:
- a director can resign as a director of a company by giving written notice of your resignation to the company at its registered office
- a proprietary company may, by resolution, remove a director from office and may, by resolution, appoint another person as a director instead
- a public company may, by resolution, remove a director from office.
Directors of public companies cannot be removed by other directors.
Sole director and member proprietary companies
If a proprietary company has only one officeholder, it does not need to follow replaceable rules or have a constitution. If another director or member is appointed or resigns, then replaceable rules automatically apply to the company. This can be changed to a constitution at a later date.
Notify ob体育 of the resignation or removal of a company director
As a director, you can notify ob体育 of your resignation or removal from the company. To be effective, the notice of resignation must be accompanied by a copy of the letter of resignation given to the company.
If you don鈥檛 notify ob体育, the company must inform ob体育 within 28 days of the resignation or retirement using this online form: Removing an officeholder
Changes to director resignations to combat illegal phoenixing
In February 2020, the Treasury Laws Amendment (Combating Illegal Phoenixing) Act 2020 was enacted to help combat illegal phoenix activity. Illegal phoenix activity involves creating a new company to continue the business of an existing company that has been deliberately liquidated to avoid paying outstanding debts, including taxes, creditors and employee entitlements.
The law prohibits company directors from improperly backdating their resignation or leaving their company with no directors.听
Date of resignation
From 18 February 2021, if you resign as director, you or the company need to notify ob体育 within 28 days of resignation. If you or the company do not notify ob体育 within 28 days, the effective resignation date will be the lodgement date. For example, if you resign on 1 March 2021 but neither you or the company notify ob体育 until 1 August 2021, your resignation date will be recorded as 1 August 2021. Late fees will still apply.
To fix the resignation date to a date earlier than 28 days, applications must be made to ob体育 or the court.
To fix a resignation date that is more than 28 days but is 56 days or less, you or the company may make an application to ob体育. You must submit Form 502 Application to change the cessation date of a director, providing reasons, within 56 days from the claimed resignation date. A fee will apply. If we accept the application, the resignation date will be fixed as the claimed resignation date, subject to the last director requirements below.
You must make your application to the court within 12 months of the claimed resignation date, unless the court allows a longer period. If the court fixes an earlier resignation date, you must lodge the order with ob体育 using Form 105听Cover page for office copy of a court order. You must lodge the order听within two business days of the court making the order. Failure to do so is an offence of strict liability and late fees will apply.
Last director resignation has no effect
Unless a company is being wound up, directors will also no longer be able to resign if they are the last remaining director on ob体育鈥檚 records (i.e. leaving a company with no directors). Accordingly, submissions using Form 484听Change to company details or Form 370听Notification by officeholder of resignation or retirement听to cease the last appointed director without replacing that appointment will be rejected.