Directors and Secretaries (Officeholder)
Company Director :
In short, a company director is responsible for determining and implementing the company’s operating policies and procedures. The director does not have to be owner (shareholder) of the company and in some cases, the director is just an employee with a higher level of responsibility to ensure the company is operating at it’s best.
Company Secretary :
A company secretary is a senior position held within a private company or public organisation, normally in the form of a managerial position. The secretary is responsible for the administration of a company with particular regard for ensuring the company’s compliance with statutory and regulatory policies are up to date. Further, the secretary ensures that decisions made by the board of directors or members are implemented and compliant with the law.
What Does The Law Expect Of An Officeholder?
- Be 18 years or older.
- Be honest and careful in your dealings at all times.
- Know what your company is doing.
- Take extra care if your company is operating a business because you may be handling other people’s money.
- Make sure that your company can pay its debts on time.
- See that your company keeps proper financial records.
- Act in the company’s best interests, even if this may not be in your own interests, and even though you may have set up the company just for personal or taxation reasons, and
- Use any information you get through your position properly and in the best interests of the company. Using that information to gain, directly or indirectly, an advantage for yourself or for any other person, or to harm the company may be a crime or may expose you to other claims. This information need not be confidential, yet if you use it the wrong way and dishonestly, it may still be a crime.
If you have personal interests that might conflict with your duty as a director, you must generally disclose these at a directors’ meeting. This rule does not apply if you are the only director of a proprietary company.
What Work Must A Director Do?
You and any other directors will control the company’s business. Your company’s constitution (if any) or replaceable rules set out the directors’ powers and functions.
You must be fully up-to-date on what your company is doing:
- Find out and assess for yourself how any proposed action will affect your company’s business performance, especially if it involves a lot of the company’s money.
- Get outside professional advice when you need more details to make an informed decision.
- Question managers and staff about how the business is going.
- Take an active part in directors’ meetings.
Only be a company director or a company secretary if you are willing, able and have enough time to put in the effort.
Avoid any company where someone offers to make you a director or secretary on the promise that ‘you won’t have to do anything’ and ‘just sign here’. You could be exposing yourself to many legal liabilities.
Can anyone be a director or secretary?
You must not act as a director or secretary (or manage a company) without court consent if you:
- Have claimed bankruptcy and have not yet been granted an order of discharge by a court.
- Are subject to a personal insolvency agreement or an arrangement under Part X of the Bankruptcy Act 1966 (Cth) (Bankruptcy Act) that has not been fully complied with
- Are subject to a composition under Part X of the Bankruptcy Act and final payment has not been made, or
- Have been convicted of various offences such as fraud or offences under company law, such as a breach of your duties as a director or insolvent trading. If you have been convicted of one of these offences you must not manage a company within five years of your conviction. If imprisoned for one of these offences, you must not manage a company within five years after your release from prison.
If you become bankrupt, enter into a personal insolvency agreement or are convicted of a relevant offence at a time when you’re a director or secretary, then you automatically lose that office. The company must then notify ASIC that you’re no longer a director or secretary of the company.
ASIC can also ban you from being a company director in certain situations.
If you’re not allowed to be a company director or secretary, you’re not allowed to manage a company. It is a serious offence to set up dummy directors while you really manage the company.
Find out about ASIC Company Ongoing Requirements