Frequently Asked Questions
Every Australian company must have at least one Australian resident.
The company can also have one or more non-resident director who can act alongside the Australian resident director.
Yes. An Australian company does not require an Australian resident shareholder. All of the shares in the Australian company can be owned by a foreign person or foreign company.
If a company has two or more directors, then all contracts entered into by the company must be signed by at least two company officers (i.e. two people who are either a director or a company secretary).
Contracts may also be entered into by a person who has been authorised to enter into the contract by at least two offices (i.e. someone with ‘delegated authority’). The party contracting with the company may ask to see this authority.
Therefore if your company had one resident director and at least one non-resident director, you will need to make arrangement so that at least two of these directors can sign each contact. One way you can overcome this is to have the company enter into a valid Company Power of Attorney giving the local director the power to sign contracts on behalf of the company.
If the company is acting as a holding company or passive investment company, then the role of the nominee director will be relatively straight-forward. However, if the company is carrying on an active trading business then the level of responsibility increases substantially.
Australian laws place a number of onerous responsibilities on a company director. There are over 700 laws in Australian than can make a director personally responsible for the obligations and liabilities of the company. For this reason person will not take on the role of a nominee directorship lightly, Particularly for trading companies.
A professional nominee director will require processes and procedures to be in place to ensure the company remains solvent and complies will all relevant local laws. A professionals nominee director will be able to assist you put these processes and procedure in place.
You need to choose carefully who you appoint as your nominee director. The person you appoint need to know what is required of them, so that your company continues to comply with all relevant Australian obligations and laws.
The director will also have considerable authority in Australia over the company affairs. You therefore need to ensure the nominee is a responsible person who knows what is required of them and who will act appropriately and in the interest of the company.
- The understanding of the nature of the company, its business plan for Australia – passive or active
- The understanding of the parent company/shareholders
- The inclusion under the parent company’s Directors & Officers Insurance (D&O) or the establishment of a policy in Australia
- Provision of appropriate Indemnities to protect the resident director and ensure non-resident director/ company have complete control over the Australian operations
- Agree of a process for approval to sign any document on behalf of the company.
