Resignation, removal and remuneration of directors

Authored by Matthew Latham, Partner, Jones Day. Updated by the LexisNexis Legal Writer team.

Resignation of directors

How to resign as a director

A person may resign as a director of a company by giving written notice to the company at its registered address: s 203A (replaceable rule). Company constitutions usually follow this replaceable rule in the Corporations Act 2001 (Cth) (Corporations Act). However, a company may, in practice, choose to dispense with the formalities set out in its constitution in relation to a director's resignation by agreement. For example, a director may resign orally despite a requirement in the constitution of a company for a written notice, provided that the verbal resignation is accepted by the company.

A director (or any other officeholder) may, but is not required to, notify Australian Securities and Investments Commission (ASIC) in writing of his or her retirement or resignation as a director by submitting a Form 370 along with a copy of the letter of resignation or retirement given to the company: s 205A. This is not a means of resigning but rather a method that a director or company secretary can use to ensure an otherwise valid resignation is publicly notified. If the outgoing director does not notify ASIC that he or she has stopped being a director under s 205A, the relevant company must notify ASIC of the change by lodging a “Change to company details” transaction (formerly) Form 484 online: ss 205B(5) and 205B(6). The company has 28 days from the date of the change to notify ASIC before penalties for late lodgment will apply.