Appointing a nominee director for new companies in Australia: Role, procedure, and benefits

What is a nominee director in Australia? 

A nominee director is an Australian resident/citizen who has been appointed by a foreign company to fulfil the resident director requirement under the Corporations Act 2001. The nominee director assumes a non-executive role, and thus cannot have direct involvement in the operations of the business. 

A nominee director must be at least 18 years of age and have a valid Director Identification Number (Director ID). When searching for the right nominee director, it’s important to ask them for the following:

• director ID or a certified copy thereof
• proof of identity
• proof of address
• knowledge of Australian regulatory and statutory compliance requirements
• history of appointments

Resident director vs. nominee director: What’s the difference?

Often used interchangeably, the terms resident director and nominee director are closely related but don’t mean the same. In technical terms, they are defined as: 

• Resident Director – an Australian citizen or permanent resident appointed to exercise executive roles and actively participate in the executive, financial, and operational aspects of the business
• Nominee Director – an Australian citizen or permanent resident appointed to fulfil the resident director requirement by name only and exercise non-executive roles, including:
  • signing legal documents;
  • managing compliance obligations with the government;
  • liaising with government agencies and financial institutions; and
  • performing other duties that foreign directors cannot perform.

Roles and responsibilities of a nominee director in Australia

Nominee directors are primarily responsible for ensuring the company is compliant with its legal and tax obligations, acting in good faith at all times for the best interests of the company. 

Unless otherwise stated in the board resolution for the appointment of the nominee director, they generally perform the following duties:

• sign legal documents on behalf of the company
• manage regulatory and statutory compliance obligations with the government
• attend regular and/or special meetings of the board of directors (as required)
• ensure company details on record with the government are accurate and updated, such as nature of business activities, registered office, and details of all directors (including date and place of birth)
• keep records of company documents, annual compliance documents, financial reports, and other official communications with government agencies 
• notify ASIC of changes to company details (i.e., appointment/removal of directors, change of principal place of business, etc.)
• liaise with government agencies and financial institutions
• perform other duties as the board of directors may allow 

Procedure for appointing a nominee director in Australia

The procedure for appointing a nominee director will usually be dictated by the provisions set out in the company constitution or replaceable rules – whichever the company intends to use to govern its internal affairs. In general, appointing a nominee director involves the following steps:

Step #1: 

If using a company constitution, it must contain authorisation for the appointment of a director; if there is none, the company must amend the constitution to allow such an appointment.

Step #2: 

When looking for a candidate, the company must thoroughly examine their suitability and professional credentials by requesting the following:

• director ID
• proof of identity
• proof of address
• history of appointments

Step #3: 

After decisions are made, the candidate for nominee director must provide in writing their acceptance of the role.

Step #4: 

The board of directors should pass a resolution for the appointment of the nominee director in a general meeting. 

Benefits of appointing a nominee director in Australia

Australian nominee directors provide many benefits beyond signing legal documents and managing compliance obligations. They can also help you with the following:

Cost savings during company registration. Nominee directors will help you save time and costs big-time during company registration. Identity checks for foreign directors take a significant amount of time and resources, but with a nominee director, you can expedite the registration process. Besides providing professional assistance during company registration with ASIC, the nominee director can also help you prepare documents ahead of time by anticipating any additional requirements that ASIC may request. 

Local representative for bank account opening. Most banks in Australia require a local representative to visit the bank for KYC purposes during account opening. Your nominee director can represent you on your behalf, especially if you are overseas. 

Confidentiality. Registered companies in Australia are legally mandated to provide the names of their directors and officeholders to ASIC. If you do not want to have your name listed in ASIC’s Registers for privacy purposes, appointing a nominee director is a great choice. You can have the nominee director register their name to fulfil the statutory requirement. 

Consolidation of critical company documents. As the document signatory and liaison of your official communications with the government, you can trust your nominee director to ensure all your company documents – including records that need to be reported to government agencies on a monthly, quarterly, or annual basis – are kept safe for easy retrieval. 

Appoint a trusted nominee director for your Australian company 

Having the information you need to appoint a nominee director is just one part of the solution. Finding the right candidate to assume the role is another story. We at Company Set Up Australia have over 15 years of solid experience in providing nominee director services to companies of varied sizes, so we have the right expertise to assist you. 

We employ only the best professionals with memberships in the Australian Institute of Company Directors, Chartered Accountants Australia & New Zealand, Governance Institute of Australia, and The Tax Institute – so you can be assured of transparent, technically proficient services.