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Changing directors in Australia? Here’s what actually matters

This image shows two professionals shaking hands in a modern office setting—likely following a successful board decision or director appointment. It visually captures the moment of formal agreement and collaboration that reflects the core of the blog post: ensuring director changes in Australian companies are handled smoothly, compliantly, and with confidence.

Replacing or appointing a director in Australia involves more than just internal company decisions. It requires close attention to legal duties, strict filing deadlines, and identity verification rules that directors must meet personally. Whether you’re handling a routine board reshuffle or dealing with an urgent resignation, following the correct steps will help avoid delays and penalties.

Who can appoint or remove a director?

Typically, shareholders hold the power to appoint or remove directors. They can do so either at a meeting or through a written resolution, depending on what the company’s constitution permits. In some cases, especially within subsidiary companies, the constitution allows the board or the parent company to make appointments directly.

When removing a director, the process is just as important. A resolution by shareholders is the standard route, but some constitutions also empower the board to act. Regardless of the approach, you must ensure that the removal doesn’t leave the company without any directors, unless a new appointment takes effect the same day or the company is being wound up.

How does the company’s constitution affect director changes?

The constitution is the cornerstone of company governance. In proprietary companies, it often gives directors flexibility to determine how decisions are made. Meetings can take place in person, through technology, or by written resolutions.

When decisions happen during a board meeting, at least two directors must be present to reach quorum, and votes generally pass with a simple majority. However, for written resolutions, unanimous agreement is often required—unless the constitution says otherwise.

Some structures, like incorporated joint ventures, may involve weighted voting rights for directors, depending on shareholder or contractual arrangements. In every case, checking the constitution first is crucial before making any move.

What are the legal requirements for appointing a new director?

Once the board or shareholders make a decision, several formalities must follow:

  • Consent to Act: The director must provide written consent confirming they accept the role.
  • Director Identification Number (DIN): Every director must apply for their own DIN before appointment. This rule applies to both residents and non-residents of Australia.
  • DIN Application Requirements: For foreign directors, the process involves submitting a paper form with:
    • A certified copy of their passport or birth certificate (primary ID)
    • A second certified ID, such as a driver’s licence or government-issued ID
    • Translated documents, if not in English
    • Certification from a notary or embassy official who must state they’ve seen the original document and confirm the copy is genuine

Directors must apply personally, no one else can complete the DIN process on their behalf.

What identification obligations must directors fulfil before appointment?

After a new appointment or resignation, the company must file the change with the Australian Securities and Investments Commission (ASIC) within 28 days. Delays will result in late fees and, more importantly, the change might not be legally recognised until the actual lodgement date.

The company must provide the following to ASIC:

  1. Full legal name, including any former names
  2. Date and place of birth
  3. Residential address
  4. Director Identification Number (DIN)
  5. Personal contact information

All of this becomes part of the public register, ensuring transparency for stakeholders and regulators.

What filings must be submitted to ASIC following a director change?

When a director resigns, they must deliver written notice to the company. From there, the company must notify ASIC within the same 28-day window. If neither party files the resignation on time, ASIC will treat the effective date as the date of lodgement, not the actual resignation date.

Importantly, a director cannot resign if it leaves the company without any directors, unless a new one is appointed the same day or the company enters liquidation.

What are the company’s obligations when a director resigns?

Australia takes corporate governance seriously. Directors who fail to apply for a DIN, provide false information, or miss compliance deadlines face hefty penalties. These can include fines of over AUD 1 million, potential civil liability, or even criminal charges.

Beyond compliance, directors must also honour a series of statutory and general law duties, such as:

  • Acting with care and diligence
  • Avoiding conflicts of interest
  • Preventing insolvent trading
  • Not misusing their position or company information

These duties continue even after a director steps down. In serious cases, directors may be banned from managing companies or held personally liable for company losses.

What are the legal consequences of non-compliance in director changes?

Changing directors in Australia isn’t just an internal matter, it’s a regulated event with real legal consequences. Companies must not only document internal approvals but also coordinate identification checks, notify regulators on time, and maintain full compliance with both the Corporations Act and their own constitution.

If your company is adjusting its leadership, plan ahead. With careful coordination, you’ll not only avoid penalties but also ensure a smooth and legally sound transition for everyone involved.

What’s next?

Klea offers tailored solutions to streamline compliance and empower your business. Book a demo today and unlock smarter corporate governance.

For more insights into processes in other jurisdictions, explore our article, Latvia Simplify AGM Compliance.

Legal Disclaimer

The information provided on Klea’s website is made available “as is” for informational purposes only. Klea does not provide legal, tax, or financial advice and is not responsible for any actions taken or not taken based on the content found on this website. In no event shall Klea be liable for any loss or damages arising from reliance on the information contained herein.

For specific legal or compliance support tailored to your business needs, please contact Klea directly. Our team provides personalized guidance and expert solutions. Any reliance on general content without direct consultation does not establish any legal responsibility or liability on Klea’s part.

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