What is the Safest Way to Resign as a Director to the Company

The Australian Government recently has changed a significant aspect of the corporation act, in which they will disallow the backdate of the director resignation. Hence, from 18 February 2021, if you want to resign from the company’s directorship, you need to notify ASIC within 28 days via written notice; if you or your company do not do that within 28 days, then the resignation will be the lodgement date. So, for example, if you resign on 1 January 2021, but neither you nor your company notify ASIC until 1 July 2021, your resignation date will be 1 July 2021, and a late fee will apply.

It is important to remember that generally, when you resign or retire or are removed as a director of an Australian company, you discharge your many legal obligation and requirements are also ceased. However, you may still be liable for your conduct while you were a director.

Hence it is essential to follow the correct procedure to remove yourself as a director. As the leading CPA accountant and tax agent in Inner West Sydney and Northern Beaches, we would assist you in removing yourself as the director.

It is essential to review your company constitutions or the ASIC’s replaceable rule to follow the correct procedure and notify ASIC of the change of the directorship in the proper ASIC form.

If the director’s resignation date is earlier than 28 days, it is an easy fix. As the leading CPA accountant and tax agent in Inner West Sydney and Northern Beaches, and Adelaide South Australia, we will help you write to ASIC to help you backdate the resignation to the date of the director’s resignation.

To fix a resignation date that is more than 28 days but is 56 days or less, you or the company may make the application to ASIC within 56 days from the claimed resignation date and using a Form 502 Application to change the cessation date of a director, providing reasons. A fee will apply. If ASIC accepts the application, the resignation date will be fixed as the claimed resignation date, subject to the last director requirements below.

Applications to the Court must be made within 12 months of the claimed resignation date unless the Court allows a longer period. If the Court fixes an earlier resignation date, the Order must be lodged with ASIC by the applicant using a Form 105 Cover page for office copy of a court order within two business days of the Court making the order. Failure to do so is an offence of strict liability and late fees will apply.

Hence as you can see from the above, it is very important that if you do want to resign as a director, you come and talk to us, and as the leading CPA accountant in inner west Sydney, Northern Beaches and Adelaide, we will help you out.