Document ID: chunk:federal_register_of_legislation:C2025C00185:section:5:p1
Version: federal_register_of_legislation:C2025C00185
Segment Type: section
Provision Reference: s 5 (pt 1/3)
Character Range: 415790–418344

5  Company directors and company secretaries

5.1 Who can be a director
  Only an individual who is at least 18 years old can be a director. If a company has only 1 director, they must ordinarily reside in Australia. If a company has more than 1 director, at least 1 of the directors must ordinarily reside in Australia.
  A director must consent in writing to holding the position of director. The company must keep the consent and must notify ASIC of the appointment.
  In some circumstances, the Corporations Act imposes the duties and obligations of a director on a person who, although not formally appointed as a director of a company, nevertheless acts as a director or gives instructions to the formally appointed directors as to how they should act.
  The Court or ASIC may prohibit a person from being a director or from otherwise being involved in the management of a company if, for example, the person has breached the Corporations Act.
  A person needs the Court's permission to be a director if the person has been convicted of certain offences or is, in some circumstances, unable to pay their debts as they fall due.
  Generally, a director may resign by giving notice of the resignation to the company. A director who resigns may notify ASIC of the resignation. If the director does not do so, the company must notify ASIC of the director's resignation.
[sections 9, 201A, 201B, 201D, 205A, 205B and 206A‑206G, 228‑230 and 242 and subsection 1317EA(3)]

5.2 Appointment of new directors
  It is a replaceable rule (see 1.6) that shareholders may appoint directors by resolution at a general meeting.
[section 201G]

5.3 Duties and liabilities of directors
  In managing the business of a company (see 1.7), each of its directors is subject to a wide range of duties under the Corporations Act and other laws. Some of the more important duties are:
• to act in good faith
• to act in the best interests of the company
• to avoid conflicts between the interests of the company and the director's interests
• to act honestly
• to exercise care and diligence
• to prevent the company trading while it is unable to pay its debts
• if the company is being wound up—to report to the liquidator on the affairs of the company
• if the company is being wound up—to help the liquidator (by, for example, giving to the liquidator any records of the company that the director has).
  A director who fails to perform their duties:
• may be guilty of a criminal offence with a penalty of imprisonment for up to 15 years or a fine, or both (the fine is