Resigning or removing a company director
Generally, when you resign or 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. Here we explain the different ways you can resign as a director.
- Follow the company’s constitution or replaceable rules
- Notify ASIC of the resignation or removal of a company director
How you resign as a director of a company depends on how your company is governed – for example, whether the company has its own constitution, if it has adopted the replaceable rules under the Corporations Act 2001 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't want to have a constitution, they can use the replaceable rules instead and do not need to have a written constitution and won't have the expense of keeping it updated as the law changes.
If a company has a written constitution they must keep a copy with their company's records. See constitution and replaceable rules for more information.
Whichever rules you adopt, 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 just one officeholder, they don't 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.
As a director, you can notify ASIC 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’t notify ASIC, the company must inform us within 28 days of the resignation or retirement using this online form: Removing an officeholder. If the company informs us within this time period, they will avoid a late fee.