Thought Catalog thoughtcatalog.com

A guide to the appointment and termination of an alternate director

8 January 2020

You'll need to give ASIC notice about the appointment or termination of an alternate director. Below is a guide.

ASIC notice

Below is the information ASIC will need about the alternate director; this guidance is from s. 205B of the Corporations Act 2001 (Cth).

s. 205B Corporations Act 2001 (Cth)

Notice of name and address of directors and secretaries to ASIC

A company must lodge with ASIC a notice of:

(a)  the personal details of a person who is appointed as an alternate director; and

(b)  the terms of their appointment (including terms about when the alternate director is to act as a director);

within 28 days after their appointment as an alternate director. The notice must be in the prescribed form.

In addition to the mandatory notice to ASIC above, there is a replaceable rule that you can use for the alternate director's duties. 

Unlike the notice requirement above, the replaceable rule is not mandatory and is below.

Replaceable means that the company can come up with its own rules instead.

201K Alternate directors (replaceable rule—see section 135)

(1)  [Appointment of alternate] With the other directors' approval, a director may appoint an alternate to exercise some or all of the director's powers for a specified period.

(2)  [Notice of meetings to alternate] If the appointing director requests the company to give the alternate notice of directors' meetings, the company must do so.

(3)  [Alternate powers those of director] When an alternate exercises the director's powers, the exercise of the powers is just as effective as if the powers were exercised by the director.

(4)  [Termination of alternate] The appointing director may terminate the alternate's appointment at any time.

(5)  [Termination must be in writing] An appointment or its termination must be in writing. A copy must be given to the company.

Note: ASIC must be given notice of the appointment and termination of appointment of an alternate (see subsections 205B(2) and (5)).

Also, below are the rules for notice about the alternate director's resignation or retirement.

The below rules also apply to a director and secretary.

205A Director, secretary or alternate director may notify ASIC of resignation or retirement

(1)  [Notice of resignation to ASIC] If a director, secretary or alternate director retires or resigns, they may give ASIC written notice of the retirement or resignation. The notice must be in the prescribed form.

(2)  [Notice accompanied by resignation letter] To be effective, a notice of resignation must be accompanied by a copy of the letter of resignation given to the company.

Note: If a director, secretary or alternative director of a company gives a written notice in accordance with this section, the company is not required to lodge a notice with ASIC under subsection 205B(5) (see subsection 205B(6)).

Do you have questions or comments about an alternate director appointment or termination? Be sure to leave them below. 


​​



Vivian Michael
 

Vivian Michael is a lawyer and founder of Michael Law Group. Vivian's mission is to deliver the best quality business legal services to entrepreneurs launching an Australian business, wherever they are in the globe.

Click Here to Leave a Comment Below 0 comments

Leave a Reply: