Expanding to Australia? Learn The Significance Of A Nominee Director

Nominee Director

This post explores the role of nominee directors, reasons businesses might require them, and more in the context of establishing a business in Australia.

What is a nominee director?

A nominee director is someone appointed by a shareholder, creditor, or interest group, either through a contractual agreement or a resolution at a company meeting. Typically, nominee resident directors are designated to advocate for the appointor’s interests at the board level.

A nominee director, in the case of an international corporate group, would be appointed to exclusively act on their behalf without independent decision-making authority. Typically, businesses employ a nominee director or resident director when expanding operations or establishing a local subsidiary in Australia.

What prompts companies to have nominee directors?

According to the Australian Corporations Act 2001, all companies establishing themselves in Australia must designate at least one director who is a resident of the country—either an Australian citizen or a migrant with the right to live and work there.

For businesses unable to meet these criteria, the appointment of a Nominee Director to act as an Australian Resident Director allows them to establish and operate a business. Visit this blog for details on the costs and requirements for setting up a company in Australia.

In cases involving businesses in sensitive or competitive sectors or individuals with diverse international interests, maintaining anonymity and safeguarding personal information from the Australian Business Register is often a priority. Opting for a nominee resident director facilitates this objective.

What conditions must be met to qualify?

To be considered eligible for a nominee director role, you must:

  1. Be 18 years of age or older.

  2. Be a resident of Australia or possess Australian citizenship.

  3. Provide written consent to undertake the responsibilities associated with a company director.

How do I locate a nominee director?

While you can personally search for and appoint Australian resident directors, this process demands a substantial amount of time and effort. Additionally, you’ll be responsible for handling all the legal documentation independently.

In cases where finding or agreeing upon an Australian resident director becomes challenging, opting for a nominee director is a viable alternative. Fullstack can provide details for nominee directors to facilitate the incorporation and day-to-day operations of your company.

What are the responsibilities?

Nominee directors in Australia fulfill a nominal role, limited to signing paperwork and carrying no active responsibilities in your business. They do not claim a share of your profits or assets, and their role can be terminated when necessary.

Advantages of having a nominee resident director

The primary advantage of a nominee director lies in their facilitation of company operations in Australia and potential anonymity. Additionally, utilising services from companies offering nominee director services often brings supplementary benefits, including assistance with accounting, tax advice, meeting company reporting obligations, and minimizing tax liability. An excellent nominee director possesses knowledge of ASIC requirements, director responsibilities, and various Australian legal, business, tax, and compliance obligations, offering valuable assistance in navigating these complexities.

Selecting a nominee director

The appointment of an Australian resident director is achieved through a resolution at a general meeting. The chosen director must satisfy eligibility requirements and furnish written, signed consent before the appointment is finalised during the general meeting.

Subsequently, the letter of appointment and pertinent documents containing the appointed director’s personal details must be formally lodged with the Australian Securities and Investments Commission (ASIC) within 28 days of the director’s appointment.

Selecting a company secretary

Appointing a company secretary is optional and not mandatory at the same time as appointing a resident director—it’s entirely up to you. If you opt for a company secretary, they must be at least 18 years old and an Australian resident. Alternatively, if the company decides not to appoint a company secretary, a nominee director has the capability to fulfill the responsibilities of the company secretary.

If you find yourself in need of guidance and support in the process of establishing an Australian subsidiary for your business, we encourage you to reach out to Fullstack today. Our dedicated team is ready to provide comprehensive assistance, ensuring a smooth and successful setup tailored to your specific needs and objectives. Don’t hesitate to connect with us for expert advice and a seamless experience in expanding your business presence in Australia.

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Stuart Reynolds is the founder of Fullstack Advisory, an award-winning accounting firm for businesses leading the future. He is a 3rd generation accountant who specialises in tech & online companies.

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