Becoming a director of a company

Only certain people are allowed to become directors, and certain procedures must be followed.

Who can be a director

To be eligible to be a director of a company, you must:

  • be at least 18 years of age
  • consent to taking on the role and responsibilities of a director.

If the company is a proprietary company – that is, it has ‘Pty’ in its name – it must have at least one director, who must ordinarily reside in Australia.

If the company is a public company (and doesn’t have ‘Pty’ in its name), it must have a minimum of three directors, at least two of whom must ordinarily reside in Australia.

Who cannot be a director

Certain types of people are not eligible to be a director of a company. You cannot be a director if you:

  • are an undischarged bankrupt
  • have entered into a personal insolvency agreement under the Bankruptcy Act 1966 and failed to fully comply with the terms of that agreement
  • have been banned by ASIC or a court from managing corporations under the Corporations Act 2001 (the length of the banning period will be set by ASIC or the court)
  • have been convicted of various dishonesty related offences, such as fraud. You will be automatically banned for five years from the date of the conviction or, if you are imprisoned, for five years from the date of your release.

If you are already a director and you become an undischarged bankrupt or do not fully comply with a personal insolvency agreement, you will be automatically disqualified from managing corporations and cease to be a director of a company unless you have been given leave by the court to manage corporations.

Consenting to become a director

You must provide your written consent to becoming a director before you are appointed as a director.

The company must keep this written consent and update ASIC whenever there are key changes to the company, including the appointment of a new director. By advising ASIC of these changes, the director’s details will be recorded on ASIC’s database.

Things to do before becoming a director

Before becoming a director, you should fully understand your role and legal obligations regarding the management of the company. You should also avoid becoming a director at the insistence of others, or on the promise that you will not have to do anything.

If you are already a director, or are about to become a director, of a company that has employees, you should immediately find out if there are any Pay As You Go (PAYG) withholding or Superannuation Guarantee Charge (SGC) amounts that are owing to the Australian Taxation Office (ATO) by the company.

If you fail to meet a PAYG withholding or SGC liability by the due date, you may become personally liable for a penalty equal to the unpaid amount under the ATO’s Director Penalty Regime.

You may also, under certain circumstances, become personally liable for your actions as director and/or for the debts of the company.


Search our registers

Use our online services

Find a form

Contact us

Last updated: 28/09/2016 11:43