Company Minutes & Resolutions Package


How much notice must company directors be given of a meeting of directors?

Generally, any director may call a meeting of directors by giving notice of the meeting to the other directors.

If your company has a Cleardocs Constitution: The director calling the meeting must give written or oral notice to all other directors - except any director who they reasonably believe is outside Australia. There is no fixed notice period.

If your company uses the replaceable rules: The director calling the meeting must give 'reasonable notice' to the other directors.

If your company has a Constitution that is not a Cleardocs Constitution: You will need to review the terms of the Constitution to check how much notice must be given of a meeting of directors and by whom. If you are unsure, you should obtain legal advice.

Who can chair a meeting of directors?

If your company has a Cleardocs Constitution or uses the replaceable rules: Any of the directors may chair the meeting of directors.

If your company has a Constitution that is not a Cleardocs Constitution: You will need to review the terms of the Constitution to check who can chair meetings of directors. If you are unsure, you should obtain legal advice.

Can a meeting of directors take place if some or all of the directors are temporarily outside Australia?

A proprietary limited company must have at least one director who ordinarily resides in Australia. If your company is unable to satisfy this requirement, you should obtain legal advice.

If your company has at least one director who ordinarily resides in Australia but some or all of the directors are temporarily outside Australia, then:

If your company has a Cleardocs Constitution: If a director is outside Australia, they are not required to be given notice of meetings of directors. They may still be able to attend meetings by using technology (such as Skype) - read more about this here.

If your company uses the replaceable rules: The replaceable rules do not deal with this issue. If a director is overseas, this may be relevant to:

  • the notice period of meetings of directors - read more about this here; and
  • whether a meeting is able to be held using technology - read more about this here.

If your company has a Constitution that is not a Cleardocs Constitution: You will need to review the terms of the Constitution to check if there are any rules which apply when directors are overseas. They may still be able to attend meetings by using technology - read more about this here. If you are unsure, you should obtain legal advice.

Can directors attend a meeting of directors by telephone or using other technology?

Yes, a director can attend a meeting of directors by telephone or other technology - as long as all the other directors consent.

The directors can agree to use any technology they wish - for example, Skype or telephone - provided it allows everyone to participate in the meeting. Each director should be able to speak to and hear all of the other directors.

A director can withdraw their consent to the use of technology to hold a meeting within a reasonable period before the meeting.

For circulating resolutions of directors, do all the directors have to sign the same set of minutes?

If your company has a Cleardocs Constitution or uses the replaceable rules: No, the directors can all sign separate copies of the minutes - but the resolutions will only take effect when the last director signs.

If your company has a Constitution that is not a Cleardocs Constitution: You will need to review the terms of the Constitution to check whether the directors can pass resolutions via circulating resolution. If they can, the directors can all sign separate copies of the minutes - but the resolutions will only take effect when the last director signs. If you are unsure, you should obtain legal advice.

Do directors and secretaries need to consent in writing prior to being appointed?

A company commits an offence under corporations law if it appoints a person as a director (including as an alternate director) or a secretary prior to the company receiving a signed consent to act from that person. A consent to act form is provided with the resolutions to appoint directors and secretaries.

How does a company appoint a director?

Generally speaking, a person is appointed as a director of a proprietary company by either:

  • the directors passing a resolution - provided that in most cases the shareholders must subsequently confirm the appointment; or
  • the shareholders passing a resolution to appoint the person as a director of the company.

You will need to review your Constitution to determine the time period for the shareholders to confirm the appointment of a director appointed by a resolution of the directors.

If your company has a Cleardocs Constitution: The appointment must be confirmed within 6 months after the appointment is made.

If your company uses the replaceable rules: The appointment must be confirmed within 2 months after the appointment is made.

If your company has a Constitution that is not a Cleardocs Constitution: You will need to review the terms of the Constitution whether a timeframe is specified - and what it is. If you are unsure, you should obtain legal advice.

If the appointment is not confirmed by the shareholders within the time period required, the person will cease to be a director when the time period expires.

When can a director be removed?

If your company has a Cleardocs Constitution: A director can be removed by either:

  • a resolution of the other directors; or
  • a resolution of the shareholders.

If your company uses the replaceable rules: A director can be removed by a resolution of the shareholders.

If your company has a Constitution that is not a Cleardocs Constitution: You will need to review the terms of the Constitution. Your Constitution may outline when and how a director can be removed. If you are unsure, you should obtain legal advice.

What is an alternate director?

An alternate director is a person appointed by a director to act on their behalf when that director is temporarily absent or otherwise unavailable to fulfil their duties - such as when the director is overseas.

The powers of the alternate director will depend on will depend on the company's Constitution - and what the alternate was appointed to do. If company has a Cleardocs Constitution, the alternate director has all of the rights and powers of the director - including voting at meetings - and any power exercised by the alternate is just as effective as if exercised by the director who appointed them. If there are any conditions which apply to the director who is appointing the alternate, then these also apply to the alternate director.

The Cleardocs Minutes and Resolutions package provides you with the documents for appointment of an alternate who will exercise all of the powers of the director for a specified period.

A director should only appoint an alternate director if they are, or expect to be, temporarily unable to act as a director. If they are, or expect to be, permanently or indefinitely unable to discharge their duties, they should resign.

Maddocks can provide you with advice on the duties of directors and how these must be discharged. To arrange to speak to a lawyer at Maddocks, please call us.

Who may appoint an alternate director?

If your company has a Cleardocs Constitution: Any of the directors may appoint an alternate for any period the director thinks fit - but this must first be approved by a majority of the other directors.The managing director may not appoint an alternate managing director.

If your company uses the replaceable rules: An alternate can only be appointed by a director with the other directors' approval.

If your company has a Constitution that is not a Cleardocs Constitution: You will need to review the terms of the Constitution to check the rules about alternate directors. If you are unsure, you should obtain legal advice.

Can a person be an alternate director for more than one director?

If your company has a Cleardocs Constitution: Yes - a person may be an alternate director for more than one director. They will need to be appointed as an alternate by each of these directors.

If your company uses the replaceable rules: The replaceable rules do not expressly allow or prohibit a person being an alternate for more than one director. If two directors wish to appoint the same alternate, they should obtain legal advice.

If your company has a Constitution that is not a Cleardocs Constitution: You will need to review the terms of the Constitution. Your Constitution may prohibit an alternate acting for more than one director. If you are unsure, you should obtain legal advice.

Can a director terminate the appointment of their alternate?

If your company has a Cleardocs Constitution or uses the replaceable rules: Yes, the appointing director may terminate the alternate’s appointment at any time. A termination of appointment must be in writing and a copy must be given to the company.

If your company has a Constitution that is not a Cleardocs Constitution: You will need to review the terms of the Constitution. Your Constitution may prohibit a director terminating their appointment of their alternate, or may impose conditions on when this may be done. If you are unsure, you should obtain legal advice.

What happens to the alternate if the director who appointed them ceases to be a director?

If the appointing director ceases to be a director, their alternate will automatically cease to be an alternate for that director. The alternate is not required to resign or be removed as an alternate. If they are also an alternate for any other director, they will remain as an alternate for that other director.

Even though the alternate will automatically cease to be an alternate director, the company must notify ASIC of both the director ceasing to be a director and the alternate ceasing to be an alternate director for that director.

When can a company secretary be removed?

If your company has a Cleardocs Constitution: The directors may remove a secretary by passing a resolution.

If your company uses the replaceable rules: A secretary will only hold office on the terms and conditions that the directors determine - how they can be removed will depend on these conditions.

If your company has a Constitution that is not a Cleardocs Constitution: You will need to review the terms of the Constitution. Your Constitution may outline when and how a secretary can be removed. If you are unsure, you should obtain legal advice.

When does a company secretary's resignation take effect?

A secretary's resignation will take effect on the later of:

  • the date of resignation specified in the secretary's resignation form; or
  • the date the company receives the resignation.

What is a 'Public Officer'?

Under Australian taxation law, every company carrying on business or earning income from property in Australia must have a public officer - unless the company is specifically exempted.

The company decides who acts as public officer in accordance with its Constitution. The Cleardocs Constitution provides that the secretary is the public officer, unless the directors decide otherwise.

The company must appoint a public officer within 3 months of the company:

  • commencing to carry on business; or
  • first earning income in Australia.

If a company fails to appoint a public officer within the 3 month period, it is guilty of an offence for each day it does not have a public officer.

The public officer must be at least 18 and must live in Australia. They must also be capable of understanding the nature of their appointment.

The public officer deals with the ATO in relation to the company's tax affairs and is responsible for ensuring that the company pays the correct amount of tax.

If a company is in default, then the public officer is liable to pay any penalties. However, the public officer is not personally liable for payment of tax due by the company.

When does a company need an auditor, and who can act as company auditor?

A company needs to appoint an auditor if it is required by corporations law to have its annual financial statements audited. This depends on the company's revenue and/or financial position. If you are unsure, you should check with the company's accountant.

A company may appoint any of the following as company's auditor - as long as they are registered:

  • an individual;
  • a firm; or
  • a company that is an authorised audit company.

A company must not make the appointment unless the individual, firm or company has consented to act as auditor of the company before the appointment.

ASIC does not need to be notified of the appointment of an auditor, but the company will need to notify ASIC of its auditor when it lodges its annual financial statements.

When does a change of registered office or principal place of business take effect?

If a company changes its registered office or principal place of business, it must notify ASIC of the new address (or addresses) and the date the change took or takes effect.

The change of registered office will take effect on the later of:

  • 7 days after the notice is lodged with ASIC; or
  • a later day specified in the notice as the date the change is to take effect.

The change of principal place of business will take effect on the date specified in the notice as the date the change is to take effect.

Who can be a managing director?

If your company has a Cleardocs Constitution or the replaceable rules: One or more of the directors may be managing director. If more than one managing director is appointed, they hold office jointly. A person may only be managing director as long as they are and remain a director - if they resign as a director, they automatically cease to hold office as managing director.

If your company has a Constitution that is not a Cleardocs Constitution: You will need to review the terms of the Constitution to check who can act as managing director. If you are unsure, you should obtain legal advice.

How can a managing director be removed?

The removal of a managing director will depend on the terms of any contract of employment for the managing director. If there is no contract of employment, this will depend on the company's Constitution, or any other terms pursuant to which the managing director was appointed.

What is voluntary deregistration?

A company exists until it is deregistered. Voluntary deregistration is one way of having a company is deregistered - it is generally the quickest and cheapest method, but is only available in fairly limited circumstances - read more about these conditions here.

An application for deregistration can be made with ASIC. The company will need to complete and lodge ASIC Form 6010 'Application for voluntary deregistration of a company' (available here) and pay the required fee.

Is voluntary deregistration the same as winding up?

No, voluntary deregistration is not the same as winding up the company.

Winding up refers to the procedure of a liquidator taking control of a company's affairs to prepare it for deregistration - the process of finalising the company's affairs, settling its liabilities and distributing any surplus assets. Winding up can be instigated by the members voluntarily, or by a court if the company is insolvent. Once the company is wound up, it can then be deregistered.

Voluntary deregistration is an application made directly to ASIC to deregister a company. It is an alternative to winding up, and avoids the need to appoint a liquidator. It can only be done if certain conditions are satisfied - read more about these conditions here.

When may an application for voluntary deregistration be made?

An application for voluntary deregistration of a company can only be made if all of the following are satisfied:

  • all members of the company agree to the deregistration;
  • the company is not carrying on business;
  • the company's assets are worth less than $1,000;
  • the company has paid all fees and penalties under corporations law;
  • the company has no outstanding liabilities (including any liabilities it may owe to employees); and
  • the company is not a party to any legal proceedings.

The person making the application for voluntary deregistration is required to declare all of these conditions have been satisfied - and it is an offence to make a false declaration.

Who may apply for voluntary deregistration of a company?

An application for voluntary deregistration of a company can be made by:

  • the company itself; or
  • any of the directors; or
  • any of the shareholders; or
  • the company's liquidator.