Corporations Act reforms to director resignation requirements become effective

Last year, as part of the changes legislated under the Treasury Laws Amendment (Combating Illegal Phoenixing) Act 2020 (Cth), new provisions were inserted into the Corporations Act 2001 (Cth) which take effect today (18 February 2021).  Directors should be aware of the following:

Section 203AA: deemed date of resignation for late lodgment

From today, the deemed effective date of a director’s resignation depends on whether the Form 484 is lodged on time. If lodged after the usual 28 day period, not only does the late fee apply as it used to, but the deemed effective date of the resignation will actually be the date the form is lodged, not the purported date of resignation.

It is possible to obtain relief ordered by the court or ASIC in certain circumstances (though the ASIC relief period is only 56 days and the court only has 12 months unless itself it decides to extend that period).

Sections 203AB & 203AC: inability to leave a company “directorless”

These provisions apply limitations on resignations and certain members’ resolutions which effectively prevent a company from becoming “directorless” except in certain exceptional circumstances.

Resignations (or members’ resolutions to remove a director) that would leave the company with no director are ineffective with limited exceptions and Forms 484 or 370 which seek to record such changes may be rejected by ASIC.

If you’d like to discuss a proposed resignation that might offend these rules, please feel free to reach out to a member of our team to discuss your requirements.