In Australia, there are a number of types of directors, known by a variety of names, and while all directors generally have the same duties and responsibilities regardless of their title, there are some subtle differences that exist. One such example is a nominee director – who is someone who must only act on your behalf and cannot take any decisions independently. A nominee director or resident director is usually employed when a business wishes to expand operations to Australia or set up a local subsidiary.
In this post, we look at what are nominee directors, why businesses may need one and more when it comes to setting up a business in Australia
Types of directors
Before we get started, let’s just take a quick look at the types of directors commonly used by businesses. These are:
- Chair
- De facto director
- Executive director
- Non-executive director
- Independent director
- Lead director
- Managing director
- Nominee resident director
- and Shadow director
So, what is a nominee director?
A nominee director is a director who is appointed by a shareholder, creditor, or interest group (whether contractually or by resolution at a company meeting).
It is generally expected that nominee resident directors are appointed to represent the interests of the appointor at a board level.
Why do companies have nominee directors?
Under the Australian Corporations Act 2001, all companies incorporating in Australia must appoint at least one director who is a resident of Australia. This person can be an Australian citizen or a migrant with rights to live and work in the country.
For businesses that aren’t able to meet the above criteria, appointing a Nominee Director otherwise known as an Australian Resident Director enables them set up and run a business. Head to this blog for more information about the costs and requirements to set up a company in Australia.
For businesses that operate in sensitive or competitive niches, or for entrepreneurs and individuals with a vested interested in many countries and businesses, it can often make sense to remain anonymous and ensure their personal information is kept out of the Australian Business Register. Appointing a nominee resident director also enables people to achieve this.
Nominee Director Services
Looking to establish your business in Australia? At POP Business we can set up your company and nominate a consultant to act as your nominee resident director, to satisfy ASIC requirements and help you navigate Australian business, tax & compliance obligations. Speak to a consultant today on 1300 180 630.
What are the criteria for becoming a nominee director?
To be eligible to be a nominee director, you must:
- Be 18 years of age or older.
- Be a resident of Australia, or hold Australian citizenship.
- Consent on paper to taking on the responsibilities of a company director.
How can I find a nominee director?
It’s possible to search and appoint Australian resident directors yourself, but it will require a great deal of time and effort. Furthermore, you will have to process all the legal documents on your own.
If you can’t locate or agree upon an Australian resident director, it is possible to use a nominee director in lieu. Companies, including POP Business can provide a nominee who can serve as a director to your company, in order to enable incorporation and everyday operation.
What will a nominee director do?
Australian resident directors will serve their roles in name only, and will not have any responsibilities in your business other than signing paperwork. Nominees do not play an active role in your company, they do not take a share of your profits or assets, and they can be removed from their role if and when required.
Benefits of a nominee resident director
The main benefit of a nominee director is their ability to enable you to run a company in Australia (and/or be anonymous). However, as most companies that offer a nominee director service also provide services such as accounting and tax advice, additional benefits from using these services include ensuring you meet your company reporting obligations and minimising your tax liability. A great nominee director will have knowledge of ASIC requirements, director responsibilities and other Australian legal, business, tax & compliance obligations and will be able to provide the assistance needed to navigate these waters.
Appointing a nominee director
An Australian resident director can be appointed through a resolution at a general meeting. The appointed director must meet the eligibility criteria and provide written and signed consent prior to the appointment in order to be properly appointed during the general meeting.
The letter of appointment and relevant documents with the appointed director’s personal details should be formally submitted to the Australian Securities and Investments Commission (ASIC) within 28 days of the director’s appointment.
Appointing a company secretary
It is not a requirement to appoint a company secretary at the same time you appoint a resident director. It’s your choice. If you choose to appoint a company secretary, the company secretary must be at least 18 years old and an Australian resident. In the event that the company does not appoint a company secretary, a nominee director can perform the responsibilities of the company secretary.
Australian Nominee Director Services by POP Business
Working with an experienced and professional company like POP Business to set-up your company using a nominee director will ensure you keep on top of all your regulatory requirements both with ASIC and the Australian Taxation Office (ATO). Our experienced team are also able to offer ongoing expert help and advice that will enable your business to grow.
To find out more call 1300 180 630 or visit the links below:
Nominee Director Services
Looking to establish your business in Australia? At POP Business we can set up your company and nominate a consultant to act as your nominee resident director, to satisfy ASIC requirements and help you navigate Australian business, tax & compliance obligations. Speak to a consultant today on 1300 180 630.
