In this edition of ‘It depends’, graduate Steven Cawood talks about what is required in order to resign as a director of a company.
Welcome to this instalment of It Depends. Today we’ll be talking about what is actually required to resign as a director of a company.
Is resigning as a director as simple as signing a resolution?
The simple answer is no. Gone are the days where resigning as a director is as simple as signing a resolution. From the 18th of February 2021, there is now an additional notice requirement and timing is critical.
How do you stop being a director?
There are effectively three steps. The first one is for the direct to actually resign and importantly, they must give this resignation to the company. Secondly, the director must ensure they have complied with all the requirements of the company’s constitution. And thirdly, ASIC must be notified of the director’s resignation.
What are the requirements of the company’s constitution?
Well, as our regular viewers would know, it depends. Not all constitutions are the same. The requirements of a constitution depends if it’s a company’s own constitution or if they’ve adopted the replaceable rules from the Corporations Act or whether it is a combination of both.
Who should notify ASIC of the directors resignation?
ASIC should be notified of the director’s resignation within 28 days. Either the company or the director themselves can notify ASIC. If it’s the company that notifies ASIC, they must do so using the form on the ASIC website. If it is a director that gives a notice, they must do so and attach their resignation.
When does a directors resignation take effect?
Well, again, it depends. If ASIC gets notified within 28 days of the resignation it takes effect from the date of the resignation. However, if ASIC is notified more than 28 days later, it takes effect from the date that ASIC is notified. Thank you for listening to this episode of It Depends. Please contact me or another member of our team if you have any questions regarding director resignations.