Corporations Act 2001
Note: This Part does not apply to a CCIV: see section 1224E .
View history note
Hide history noteA proprietary company must have at least 1 director. That director must ordinarily reside in Australia.
201A(1A)However, a proprietary company must have at least 2 directors while the company has one or more CSF shareholders. Of those directors:
(a) if there are only 2 of them - at least one of them must ordinarily reside in Australia; or
(b) otherwise - a majority of them must ordinarily reside in Australia.
Note: The company must also have at least 2 directors when making the CSF offer (see paragraph 738H(1)(a) ).
201A(2) Public companies.
A public company must have at least 3 directors (not counting alternate directors). At least 2 directors must ordinarily reside in Australia.
SECTION 201B WHO CAN BE A DIRECTOR 201B(1)Only an individual who is at least 18 may be appointed as a director of a company.
201B(2)
A person who is disqualified from managing corporations under Part 2D.6 may only be appointed as director of a company if the appointment is made with permission granted by ASIC under section 206GAB or leave granted by the Court under section 206G .
SECTION 201C 201C DIRECTORS OF PUBLIC COMPANIES, OR SUBSIDIARIES, OVER 72
(Repealed by No 24 of 2003, s 3, Sch 5 [ 7] (effective 11 April 2003).) SECTION 201D CONSENT TO ACT AS DIRECTOR 201D(1) [ Need for signed consent]
A company contravenes this subsection if a person does not give the company a signed consent to act as a director of the company before being appointed.
201D(2) [ Consent to be retained]The company must keep the consent.
201D(3) [ Strict liability offence]An offence based on subsection (1) or (2) is an offence of strict liability.
Note: For strict liability , see section 6.1 of the Criminal Code .
A resolution passed at a general meeting of a public company appointing or confirming the appointment of 2 or more directors is void unless:
(a) the meeting has resolved that the appointments or confirmations may be voted on together; and
(b) no votes were cast against the resolution. 201E(2) [ Exclusions]
(a) a resolution to appoint directors by an amendment to the company's constitution (if any); or
(b) a ballot or poll to elect 2 or more directors if the ballot or poll does not require members voting for 1 candidate to vote for another candidate. 201E(3) [ Requirement of ballot or poll]
For the purposes of paragraph (2)(b), a ballot or poll does not require a member to vote for a candidate merely because the member is required to express a preference among individual candidates in order to cast a valid vote.
SECTION 201F SPECIAL RULES FOR THE APPOINTMENT OF DIRECTORS FOR SINGLE DIRECTOR/SINGLE SHAREHOLDER PROPRIETARY COMPANIES 201F(1) [ Power to appoint another director]The director of a proprietary company who is its only director and only shareholder may appoint another director by recording the appointment and signing the record.
201F(2) Appointment of new director on death, mental incapacity or bankruptcy.If a person who is the only director and the only shareholder of a proprietary company:
(a) dies; or
(b) cannot manage the company because of the person's mental incapacity;
and a personal representative or trustee is appointed to administer the person's estate or property, the personal representative or trustee may appoint a person as the director of the company.
201F(3) [ Appointment upon bankruptcy](a) the office of the director of a proprietary company is vacated under subsection 206B(3) or (4) because of the bankruptcy of the director; and
(b) the person is the only director and the only shareholder of the company; and
(c) a trustee in bankruptcy is appointed to the person's property;
the trustee may appoint a person as the director of the company.
201F(4) [ Power to appoint themselves]A person who has a power of appointment under subsection (2) or (3) may appoint themselves as director.
201F(5) [ Effect of appointment]A person appointed as a director of a company under subsection (2), (3) or (4) holds office as if they had been appointed in the usual way.
SECTION 201G 201G COMPANY MAY APPOINT A DIRECTOR (REPLACEABLE RULE - SEE SECTION 135)A company may appoint a person as a director by resolution passed in general meeting. SECTION 201H DIRECTORS MAY APPOINT OTHER DIRECTORS (REPLACEABLE RULE - SEE SECTION 135) 201H(1) Appointment by other directors.
The directors of a company may appoint a person as a director. A person can be appointed as a director in order to make up a quorum for a directors' meeting even if the total number of directors of the company is not enough to make up that quorum.
201H(2) Proprietary company - confirmation by meeting within 2 months.If a person is appointed under this section as a director of a proprietary company, the company must confirm the appointment by resolution within 2 months after the appointment is made. If the appointment is not confirmed, the person ceases to be a director of the company at the end of those 2 months.
201H(3) Public company - confirmation by next AGM.If a person is appointed by the other directors as a director of a public company, the company must confirm the appointment by resolution at the company's next AGM. If the appointment is not confirmed, the person ceases to be a director of the company at the end of the AGM.
[ CCH Note: There is no section 201I.]
The directors of a company may appoint 1 or more of themselves to the office of managing director of the company for the period, and on the terms (including as to remuneration), as the directors see fit. SECTION 201K ALTERNATE DIRECTORS (REPLACEABLE RULE - SEE SECTION 135) 201K(1)
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.
201K(2)
If the appointing director requests the company to give the alternate notice of directors ' meetings, the company must do so.
201K(3)
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.
201K(4)
The appointing director may terminate the alternate ' s appointment at any time.
201K(5)
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) ).
[ CCH Note: S 201K(5) will be amended by No 69 of 2020, s 3, Sch 1[517], by substituting " The Registrar " for " ASIC " in the note, (effective 1 July 2026 or a day or days to be fixed by Proclamation).]
SECTION 201L 201L SIGNPOST - ASIC TO BE NOTIFIED OF APPOINTMENT
[ CCH Note: S 201L heading will be amended by No 69 of 2020, s 3, Sch 1[518], by substituting " THE REGISTRAR " for " ASIC " , (effective 1 July 2026 or a day or days to be fixed by Proclamation).]
Under section 205B , a company must notify ASIC within 28 days if a person is appointed as a director or as an alternate director.
[ CCH Note: S 201L will be amended by No 69 of 2020, s 3, Sch 1[519], by substituting " the Registrar " for " ASIC " , (effective 1 July 2026 or a day or days to be fixed by Proclamation).]
An act done by a director is effective even if their appointment, or the continuance of their appointment, is invalid because the company or director did not comply with the company ' s constitution (if any) or any provision of this Act.
201M(2)
Subsection (1) does not deal with the question whether an effective act by a director: (a) binds the company in its dealings with other people; or (b) makes the company liable to another person.
Note: The kinds of acts that this section validates are those that are only legally effective if the person doing them is a director (for example, calling a meeting of the company ' s members or signing a document to be lodged with ASIC or minutes of a meeting). Sections 128 - 130 contain rules about the assumptions people are entitled to make when dealing with a company and its officers.
[ CCH Note: S 201M(2) will be amended by No 69 of 2020, s 3, Sch 1[520], by inserting " or the Registrar " after " ASIC " in the note, (effective 1 July 2026 or a day or days to be fixed by Proclamation).]
Subdivision B - Limits on numbers of directors of public companies
This Subdivision applies in relation to a public company if its constitution allows its directors to set a limit (a board limit ) whose effect is to restrict the number of directors of the company to a number less than the maximum number of directors specified in the constitution.
Note: This Subdivision applies however the constitution or board limit is expressed.
201N(2)
If a company ' s constitution provides that the maximum number of directors is either a specified number or another number determined by the directors:
(a) any number determined by the directors that is lower than the specified number is a board limit ; and
(b) any lowering by the directors of that lower number is also a board limit .
201N(3)
Subsection (2) does not limit, and is not limited by, subsection (1).
[ CCH Note : There is no section 201O.]
The directors must not set a board limit unless:
(a) a resolution (a board limit resolution ) approving the proposal to set the limit specified in the resolution has been passed by a general meeting of the company; and
(b) the notice of the meeting set out an intention to propose the board limit resolution and stated the resolution; and
(c) the notice was accompanied by a statement explaining the resolution and meeting the requirements in section 201Q .
Note 1: Subsection 249L(3) requires information in the notice of meeting to be presented clearly, concisely and effectively.
Note 2: Section 201U specifies the consequences of a contravention of subsection (1) of this section. Also, section 1324 provides for injunctions to enforce subsection (1) of this section.
201P(2)
A board limit resolution has effect until immediately before the start of the first AGM of the company after the general meeting by which the resolution was passed.
201P(3)
A board limit resolution does not prevent the appointment of a person as a director of the company by the other directors of the company between general meetings of the company.
201P(4)
However, if a person is appointed by the other directors as a director of the company while a board limit resolution has effect, the company must confirm the appointment by resolution at the company ' s next AGM. If the appointment is not confirmed, the person ceases to be a director of the company at the end of the AGM.
201P(5)
Subsections (1), (2) and (4) have effect despite the company ' s constitution.
Note: Although subsection (4) is like subsection 201H(3) in many ways, it is not a replaceable rule like subsection 201H(3) .
The statement accompanying the notice of a general meeting stating an intention to propose the board limit resolution must be in writing and set out clearly, concisely and effectively:
(a) the directors ' reasons for proposing the board limit resolution; and
(b) all other information that:
(i) is reasonably required by members in order to decide whether or not it is in the company ' s interests to pass the proposed board limit resolution; and
(ii) is known to the company or to any of its directors.
Note: Section 1309 creates offences where false and misleading material relating to a corporation ' s affairs is made available or furnished to members.
This section applies if a poll is duly demanded, or is otherwise required under section 250JA , on the question that the board limit resolution be passed.
201R(2)
For each member of the company who votes on the poll in person, the company must record in writing: (a) the member ' s name; and (b) how many votes the member casts for the resolution and how many against.
Note: Failure to comply with this subsection is an offence: see subsection 1311(1) .
201R(3)
For each member of the company who votes on the poll by proxy, or by a representative authorised under section 250D , the company must record in writing: (a) the member ' s name; and (b) in relation to each person who votes as proxy, or as such a representative, for the member:
(i) the person ' s name; and
(ii) how many votes the person casts on the resolution as proxy, or as such a representative, for the member; and
(iii) how many of those votes the person casts for the resolution and how many against.
Note: Failure to comply with this subsection is an offence: see subsection 1311(1) .
The company must lodge a notice setting out the text of the board limit resolution within 14 days after the resolution is passed.
[ CCH Note: S 201S will be amended by No 69 of 2020, s 3, Sch 1[521], by inserting " with the Registrar " after " lodge " , (effective 1 July 2026 or a day or days to be fixed by Proclamation).]
The Court may declare that a requirement set by section 201Q , 201R or 201S has been satisfied if the Court finds that it has been substantially satisfied.
201T(2)
A declaration may be made only on the application of an interested person.
Application
201U(1)
This section applies if the directors of the company set a board limit in contravention of subsection 201P(1) .
Board limit etc. ineffective
201U(2)
The board limit and anything done in reliance on it have no effect for the purposes of:
(a) the company ' s constitution; or
(b) this Act, except this section.
Note: If a board limit resolution is not passed, the number of directors of a company that can be appointed (for example by a general meeting) depends on the maximum number of directors specified by the company ' s constitution. This is so even if the directors purport to set a board limit despite the fact the board limit resolution was not passed.
201U(3)
If:
(a) one or more directors are appointed by one or more resolutions passed at a particular general meeting of the company; and
(b) because of the board limit, the general meeting was not given the opportunity to pass one or more resolutions appointing a number of directors such that the number of directors of the company would (if those resolutions had been passed) have exceeded the board limit;
every appointment of director made by a resolution passed at the general meeting is invalid.
Note: This subsection does not apply if a shortage of persons consenting to be appointed director was the reason the general meeting was not given the opportunity to pass one or more resolutions appointing a number of directors such that the number of directors of the company would (if those resolutions had been passed) have exceeded the board limit.
201U(4)
Subsections (2) and (3) have effect despite anything else in the company ' s constitution or in this Act, except sections 128 , 129 and 201M .
Note: Sections 128 and 129 deal with assumptions a person dealing with the company may make, including assumptions about the due appointment of directors. Section 201M deals with effectiveness of acts by a director in circumstances where the director ' s appointment is invalid for certain reasons.
Company and candidates for directors may seek compensation
201U(5)
Subsection (6) applies if either of the following (the suffering party ) suffers loss or damage because of the setting of the board limit in contravention of subsection 201P(1) :
(a) the company;
(b) a person for whom both the following conditions are met:
(i) the person had given the company a written indication that he or she would be a candidate to be appointed director at a general meeting;
(ii) because of the board limit, the general meeting was not given the opportunity to consider passing a resolution to appoint the person as director.
201U(6)
The suffering party may institute a proceeding in the Court for the contravention.
Note: Section 1325 deals with the orders the Court may make to compensate the suffering party for the loss.
Contravention does not give rise to an offence
201U(7)
A person is not guilty of an offence because of the contravention.
The directors of a company are to be paid the remuneration that the company determines by resolution.
Note: Chapter 2E makes special provision for the payment of remuneration to the directors of public companies.
202A(2) [ Expenses]The company may also pay the directors' travelling and other expenses that they properly incur:
(a) in attending directors' meetings or any meetings of committees of directors; and
(b) in attending any general meetings of the company; and
(c) in connection with the company's business. SECTION 202B MEMBERS MAY OBTAIN INFORMATION ABOUT DIRECTORS' REMUNERATION 202B(1) [ Disclosure upon direction]
A company must disclose the remuneration paid to each director of the company or a subsidiary (if any) by the company or by an entity controlled by the company if the company is directed to disclose the information by:
(a) members with at least 5% of the votes that may be cast at a general meeting of the company; or
(b) at least 100 members who are entitled to vote at a general meeting of the company.
The company must disclose all remuneration paid to the director, regardless of whether it is paid to the director in relation to their capacity as director or another capacity.
202B(1A) [ Strict liability offence]An offence based on subsection (1) is an offence of strict liability.
Note: For strict liability , see section 6.1 of the Criminal Code .
The company must comply with the direction as soon as practicable by:
(a)preparing a statement of the remuneration of each director of the company or subsidiary for the last financial year before the direction was given; and
(b) having the statement audited; and
(c) sending a copy of the audited statement to each person entitled to receive notice of general meetings of the company. SECTION 202C 202C SPECIAL RULE FOR SINGLE DIRECTOR/SINGLE SHAREHOLDER PROPRIETARY COMPANIES
A person who is the only director and the only shareholder of a proprietary company is to be paid any remuneration for being a director that the company determines by resolution. The company may also pay the director's travelling and other expenses properly incurred by the director in connection with the company's business. Division 3 - Resignation, retirement or removal of directors SECTION 203A 203A DIRECTOR MAY RESIGN BY GIVING WRITTEN NOTICE TO COMPANY (REPLACEABLE RULE - SEE SECTION 135)
A director of a company may resign as a director of the company by giving a written notice of resignation to the company at its registered office. SECTION 203AA RESIGNATION OF DIRECTORS - WHEN RESIGNATION TAKES EFFECT
When resignation takes effect
203AA(1)
A person ' s resignation as a director of a company takes effect on:
(a) if, within 28 days after the day the person stopped being a director of the company, ASIC is notified of that fact under subsection 205A(1) or 205B(5) - the day the person stopped being a director of the company; or
(b) in any other case - the day written notice is lodged with ASIC stating that the person has stopped being a director of the company.
Note 1: A director includes a person appointed to the position of alternate director, see the definition of director in section 9 .
Note 2: For the application of this section, see Part 10.37 .
203AA(2)
However, if:
(a) because of paragraph (1)(b), the person ' s resignation takes effect on a day that is not the day the person stopped being a director of the company; and
(b) the person or the company applies to ASIC or the Court for it to fix, as the day the person ' s resignation takes effect, the day (the resignation day ) that the person stopped being a director of the company; and
(c) the application is made in accordance with subsection (5); and
(d) the applicant satisfies ASIC or the Court that the person stopped being a director of the company on the resignation day;
ASIC or the Court may fix the resignation day as the day the person ' s resignation takes effect.
203AA(3)
The Court must not fix the resignation day as the day the person ' s resignation takes effect unless it is satisfied that it is just and equitable to do so.
203AA(4)
ASIC must not fix the resignation day as the day the person ' s resignation takes effect unless it has had regard to:
(a) any conduct, act, omission or representation of the applicant in relation to notifying ASIC of the resignation; and
(b) the reasons for any delay in notifying ASIC of the resignation.
Application to ASIC or the Court
203AA(5)
For the purposes of paragraph (2)(c), the application:
(a) if made to ASIC - must:
(i) be made within 56 days after the day the person stopped being a director of the company; and
(ii) be lodged in the prescribed form; or
(b) if made to the Court - must be made within either:
(i) 12 months after the day the person stopped being a director of the company; or
(ii) such longer period as the Court allows.
Notification to ASIC
203AA(6)
If the Court fixes the resignation day as the day the person ' s resignation takes effect, the applicant must, within 2 business days after the Court fixes the resignation day, lodge with ASIC a copy of the order made by the Court that fixes the day.
203AA(7)
An offence based on subsection (6) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code .
Company must be left with at least 1 director
203AA(8)
This section has effect subject to section 203AB .
The resignation of a director of a company does not take effect if, at the end of the day that the resignation is to take effect, the company does not have at least one director.
Note: For the application of this section, see Part 10.37 .
203AB(2)
However, subsection (1) does not prevent the resignation of a director of a company taking effect if the resignation is to take effect on or after the day that the winding up of the company is taken, because of Division 1A of Part 5.6 , to have begun.
A person ceases to be a director of a company if the person becomes disqualified from managing corporations under Part 2D.6 (see subsection 206A(2) ) unless ASIC or the Court allows them to manage the company (see sections 206GAB and 206G ).
A proprietary company:
(a) may by resolution remove a director from office; and
(b) may by resolution appoint another person as a director instead. SECTION 203CA RESOLUTION TO REMOVE DIRECTORS - RESOLUTION IS VOID IF PROPRIETARY COMPANY HAS NO OTHER DIRECTORS 203CA(1)
A resolution by members of a proprietary company to remove a director of the company is void if, at the end of the day that the resolution is to take effect, the company does not have at least one director.
Note: For the application of this section, see Part 10.37 .
203CA(2)
However, subsection (1) does not affect the validity of a resolution by members of a proprietary company to remove a director of the company if the resolution is to take effect on or after the day that the winding up of the company is taken, because of Division 1A of Part 5.6 , to have begun.
A public company may by resolution remove a director from office despite anything in:
(a) the company's constitution (if any); or
(b) an agreement between the company and the director; or
(c) an agreement between any or all members of the company and the director.
If the director was appointed to represent the interests of particular shareholders or debenture holders, the resolution to remove the director does not take effect until a replacement to represent their interests has been appointed.
Note: See sections 249C to 249G for the rules on who may call meetings, sections 249H to 249M on how to call meetings and sections 249N to 249Q for rules on members' resolutions.
203D(2) Notice of intention to move resolution for removal of director.Notice of intention to move the resolution must be given to the company at least 2 months before the meeting is to be held. However, if the company calls a meeting after the notice of intention is given under this subsection, the meeting may pass the resolution even though the meeting is held less than 2 months after the notice of intention is given.
Note: Short notice of the meeting cannot be given for this resolution (see subsection 249H(3)).
203D(3) Director to be informed.The company must give the director a copy of the notice as soon as practicable after it is received.
203D(4) Director's right to put case to members.The director is entitled to put their case to members by:
(a)giving the company a written statement for circulation to members (see subsections (5) and (6)); and
(b) speaking to the motion at the meeting (whether or not the director is a member of the company). 203D(5) [ Circulation of statement]
The written statement is to be circulated by the company to members by:
(a) sending a copy to everyone to whom notice of the meeting is sent if there is time to do so; or
(b) if there is not time to comply with paragraph (a) - having the statement distributed to members attending the meeting and read out at the meeting before the resolution is voted on. 203D(6) [ Exceptions]
The director's statement does not have to be circulated to members if it is more than 1,000 words long or defamatory.
203D(7) Time of retirement.If a person is appointed to replace a director removed under this section, the time at which:
(a) the replacement director; or
(b) any other director;
is to retire is to be worked out as if the replacement director had become director on the day on which the replaced director was last appointed a director.
203D(8) Strict liability offences.An offence based on subsection (3) or (5) is an offence of strict liability.
Note: For strict liability , see section 6.1 of the Criminal Code .
A resolution, request or notice of any or all of the directors of a public company is void to the extent that it purports to:
(a) remove a director from their office; or
(b) require a director to vacate their office. SECTION 203F TERMINATION OF APPOINTMENT OF MANAGING DIRECTOR (REPLACEABLE RULE - SEE SECTION 135) 203F(1) [ Cease to be managing director]
A person ceases to be managing director if they cease to be a director.
203F(2) [ Powers to revoke or vary appointment]The directors may revoke or vary an appointment of a managing director.