Director obligations in Australia

Being named as a director of an Australian company comes with real legal duties. Whether you're the founder or joining someone else's company, it's important to understand what the role requires under the Corporations Act 2001.

Who can be a director?

To be appointed as a director of an Australian company, you must:

• Be at least 18 years old (s. 201B of the Corporations Act)
• Not be disqualified by ASIC or a court from managing companies
• Consent to the appointment

Additionally, every proprietary company must have:

• At least one director who ordinarily resides in Australia (s. 201A)

Core duties of a director

The Corporations Act sets out several key duties. These aren't just guidelines — breaching them can result in civil penalties, fines, or even criminal charges.

1. Act in good faith and for a proper purpose

You must act honestly and in the best interests of the company as a whole — not for personal gain or to benefit one shareholder over another.

2. Exercise care and diligence

You're expected to make informed, reasonable decisions. This means staying across the company's financial position, reading reports, and asking questions when something doesn't seem right.

3. Not misuse your position

Don't use your role as director to create an advantage for yourself or someone else, or to cause harm to the company.

4. Not misuse company information

Confidential information you access as a director must not be used for personal benefit or disclosed improperly.

5. Disclose conflicts of interest

If you have a personal interest in a matter the company is dealing with, you must disclose it to the other directors.

6. Prevent insolvent trading

One of the most significant duties: you must not allow the company to incur debts when you know (or should reasonably suspect) the company cannot pay them as they fall due. This is known as the duty to prevent insolvent trading (s. 588G).

Ongoing compliance obligations

Beyond the legal duties above, directors are responsible for ensuring the company:

• Maintains accurate financial records
• Notifies ASIC of any changes to company details within 28 days (address, directors, shareholders, etc.)
• Pays the annual review fee to ASIC
• Lodges tax returns and BAS statements on time
• Meets superannuation obligations for employees — including Payday Super requirements from 1 July 2026

Director vs Secretary

A company can also appoint a company secretary, though it's not mandatory for proprietary companies. In many small companies, the first director also serves as the secretary.

On our platform, you choose who acts as secretary during the directors step — it can be the first director or a separate person.

Information we collect during registration

For each director, our platform collects:

• Full legal name
• Date of birth
• Place of birth (City, Country)
• Australian resident status
• TFN and ABN (optional)

You can save director details as "saved entities" and reuse them across multiple registrations — ideal if you're setting up more than one company.

What happens if you breach your duties?

Consequences can include:

• Civil penalty orders (fines up to $200,000+ for individuals)
• Compensation orders requiring you to pay for losses caused
• Disqualification from managing companies
• Criminal prosecution in severe cases

Practical tips for new directors

1. Stay informed — Regularly review financial reports and understand the company's cash position
2. Keep records — Document key decisions, especially around financial commitments
3. Use our compliance roadmap — After registration, our platform provides a 90-day roadmap that walks you through your post-registration obligations phase by phase
4. Get professional advice — For complex matters, consult an accountant or corporate lawyer