A company needs to have a minimum number of officeholders. This includes directors and secretaries. This article will go through the minimum amount of officeholders needed for a company in Australia.
Definition of Officeholders
Director
A director is an officer of your company that is in charge of managing the company’s business activities. Further, a director can also be a shareholder and make decisions on the board.
Secretary
A company secretary is responsible for monitoring and administering the company. They need to make sure that the company is complying with the regulations by keeping accurate records.
Officeholders for Proprietary Companies
This company has to have at least one director. That director has to live in Australia. If this company has crowd-sourced funded shareholders, it has to have at least two directors. A majority of these directors have to live in Australia. This company is not required to have a secretary. If it does, they must live in Australia.
Officeholders for Public Companies
A public company must have at least three directors. This doesn’t include alternate directors. Further, at least two of the directors have to live in Australia. This company also has to have at least one secretary. The secretary has to live in Australia.
Corporations Act 2001
If a company does not have enough officers, it will be breaching the Corporations Act 2001 (Cth). Further, this can result in the company facing penalties for not meeting its obligations. Thus, new officers must be appointed as soon as possible.
The consequences can be:
- A penalty notice on the company requiring the company to pay a penalty of $1062.50.
- The company can also be prosecuted for failing to meet its statutory obligation.
Alternate directors
A company director can appoint someone else to act as an alternate director for a set period of time. The powers of the alternate director can vary from some to all of the powers that a director would have. An alternate director can also act as the alternate for more than one director. Further, you must lodge this application with ASIC within 28 days of appointment.
Conclusion
A company needs to have a minimum number of officeholders. Although this minimum is dependent on the type of company that it falls under. It is a good idea to talk to a business lawyer to ensure the certainty of the future decisions you will make.
