Director Resignation Changes

Effective 18 February 2021, if a person stops being a director of a company, they or the company, must notify ASIC within 28 days.

Failure to notify ASIC within 28 days of resignation will mean ASIC will only update its records to record the resignation taking effect on the day ASIC receives the written notification (Corporations Act S. 203AA). Outside of this 28 day period, ASIC or the Court, may, on application, fix the date of resignation.

We have seen instances where resignation notices to ASIC have been backdated by three (3) years!!

No Director

The resignation of a director will not take effect if such resignation leaves the company with no director. This
ensures consistency with Corporations Act S.201A.

Key Take Away

Directors must be mindful to the changes and act so as to avoid potential personal liability under the Corporations Act in cases where a company may be (or deemed) to be insolvent.