March 19, 2017

director at startup

4 things to know before you accept an Australian director position

Updated: 8 December 2019

A company is operated by directors and secretaries. Both have obligations under Australian legislation. 

Limited liability, the ability to allocate shares to investors and a favourable tax regime are all perks of the company structure.

So what does it take to be a director at a startup? Below are some insights to guide you.

1. Who can be a director?

You can be a director if you are at least 18 years old and consent to being a director before you are appointed as a director. Seems like a pretty low threshold right?

2. Australian resident

In addition, to set up a proprietary company, at least one director needs to ordinarily reside in Australia.

3. Legal responsibilities

In addition to the above requirements, you have legal responsibilities.

You should know that there is no such thing as a silent director that exists only on ASIC paper work and because of this, you need to be aware of whats required.

Regardless of whether you are a sole director at a company or one of many, you are legally responsible for how the company is run.

Directors and company secretaries have responsibilities per the Corporations Act, the most noteworthy include:

  • to act in good faith and in the best interests of the company; and
  • to exercise care and diligence; and 
  • to avoid conflicts of interest between the company and your personal interests; and 
  • to prevent the company from trading while insolvent (unable to pay debts when due); and 
  • to assist a liquidator if the company is wound up.

In addition to these general legal responsibilities, there are specific director responsibilities outlined below. 

4. Director responsibilities

Responsibilities are inevitable with your director role. We’ve broken down those responsibilities into 3 categories: (a) general (b) administrative and also (c) company operations.

(a) General

Especially relevant, key general director duties include: 

  • be honest and careful in your dealings at all times; and 
  • know what your company is doing; and 
  • take extra care if your company is handling other people's money.

(b) Administrative

As a director, you are also responsible for administrative duties to keep ASIC records up to date. The most noteworthy include:

  • Your current registered address; and 
  • Personal details of directors - name, date of birth and current residential address; and 
  • company financial records; and 
  • notifying ASIC of certain changes including - registered office, directors, principal place of business; and 
  • paying fees to ASIC - for example, the annual renewal fee.

Also, you may be interested to know we have templates to help you meet your administrative duties, simply click the button below to view our special package.

(c) Company operations

In addition, you are responsible for company operations including to:

  • make sure that your company can pay its debts on time; and
  • see that your company keeps proper financial records; and 
  • acting the company's best interests, even if this may not be in your best interests; and 
  • use any information you get through your position properly and in the best interests of the company. 


If you are in doubt, gather more information before accepting a director position and get your own independent advice.

Finally, you should only agree to be a director if you can carry out the duties, no matter what anyone tells you, being a director will never be just a title, you will have responsibilities that cannot be pardoned by ASIC.

About the author 

Vivian Michael

As founder and lawyer at Michael Law Group, Vivian advises Australia's top entrepreneurs on business and employment matters. Clients benefit from Vivian's commercially focussed and pragmatic legal advice, business experience, and commitment to deliver the best quality business legal services to her clients.

  • Hi Vivian, My Canadian company owns 100% of an Australian company that was setup about two-years ago but never became active (No employees, no bank accounts, no assets etc) or made any filings, paid fees, etc. as our business plans changed. A friend of mine (Australian) is the director. Will the ASIC eventually de-register the company or are we required to do so? Is there any liability on my friends behalf for the annual filing fees? Thank you for your help.

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