Please follow the below Q&A for some of the most frequently asked questions.
Who can be a Resident Director?
In the presentations provided it was pointed out that you require to have a resident director who may be a non-executive Director. However at the same time you should nominate at least two other Directors from your organisation for the Pty Ltd Australian registered company so that you maintain voting control.
A Resident Director may be:
- You or a representative of your company having obtained a Resident Visa
- A locally engaged employee
- Any non employee local resident you choose
- A professional short term Local Resident Director who works for a fee and a specified term of engagement.
Why are their questions about my company shareholders?
Your bank will do a check on your current shareholders using standard international reference checking processes. They have a regulatory obligation to Anti Money Laundering regulations to know their clients (KYC).
Can the Sydney Start-up Hub (SSH) International Landing Pad (ILP) be a registered address?
Yes, but the SSH does not want to act as a reception for your members' mail. You can use York St as the registered address but provide a PO Box or your local accountant as the mailing address.
Similarly if you have a registered address in another city - Brisbane or Melbourne - that has no impact on being approved or signing an ILP Desk Agreement.
When you leave the ILP you can notify ASIC of a change of address so that any mail from them is sent to that new location. That's why it would be better to appoint a local accounting service and use their address going forward.
Where can I find Local Service Providers?
During our presentations we introduced you to the team from the NSW branch of the Institute of Chartered Accountant of India. Padamini Dixit from Mazars presented the requirements for registering and managing your Australian presence.
Lalit Khanna in conjunction with the ICAI has a list of recommended NSW service providers that can assist you in registering and managing your Pty Ltd company.
Please approach him if you wish to avail yourself of this support.
The presentation from ICAI is available above under 'Institute of Chartered Accountants of India (ICAI) - Australia Chapter'.
Company Director requirements
What are the basic requirements?
Section 201B of the Corporations Act 2001 provides that a director must:
- Be an individual, not a body corporate
- Be at least 18 years of age
- Not be disqualified from managing corporations under Part 2D.6. If they have been disqualified, the appointment must be made with permission granted by ASIC under s 206F or leave granted by the Court under s 206G
There is no upper age limit specified in the Corporations Act 2001 for a director. However, a company's constitution may have age restrictions.
Does a director need to hold shares in the company?
There is no requirement in the Corporations Act 2001 that a director must hold shares in his or her company.
Some companies will specify in their constitution that a person has to hold a certain number of shares before being appointed a director. Other constitutions may require the new director to buy shares within a certain timeframe of being appointed. Failure to meet these conditions will void the appointment.
How many directors are needed?
In public companies, there needs to be at least three directors, two of whom ordinarily reside in Australia. If a person is appointed as a director by the other directors of a public company, the appointment must be confirmed by ordinary resolution at the company’s next annual general meeting (AGM) or that person will cease to be a director at the end of the AGM (s 201H(3)). Similarly, where a person is appointed as a director of a proprietary company, the company must confirm the appointment by resolution within two months after the appointment is made or that person will cease to be a director (s 201H(2)).
A proprietary company must have at least one director, who must ordinarily reside in Australia. For single director/single shareholder proprietary companies, a second director can be appointed by the original director recording the appointment and signing the record (s 201F).
A person may occupy the position of both director and secretary of a public or proprietary company.
Is written consent required?
A person must give the company their written consent to act as a director of the company before being appointed and the company has to keep the consent (s 201D). Failure to do so constitutes an offence under the Corporations Act 2001.
The company must notify ASIC of appointments, retirements and resignations of directors from office. The notifications must include certain personal details (e.g address and date of birth) (s 205B). Currently, this can be achieved by lodging an ASIC Form 484 within the prescribed 28 day period.
