Smooth transitions - updating company officeholder details with ASIC
It is a common occurrence, whereby due to administrative oversight, ASIC has not been notified on time by either the company or the officeholder themselves of a relevant company officeholder change.
Officeholders find themselves in the unenviable and awkward position of discovering they are still listed in ASIC’s records as being a director, even though days or months have passed since they handed in their official letter of resignation to the company.
Failing to notify ASIC of such changes within the required time periods, can result in late fees or penalties for the company, or ASIC sending warning letters, issuing notices, or taking various forms of enforcement action against the company. In this article we provide information on how to appropriately notify ASIC about changes to company officeholder details and outline the key processes and requirements involved.
1. Changing officeholder details
The term 'officeholders' encompasses directors and secretaries of a company.
The company secretary typically ensures compliance with legal and regulatory requirements and often handles administrative tasks related to officeholder changes (although this need not always be the company secretary and the task can be outsourced).
Timely notification of officeholder changes to ASIC within 28 days is imperative to avoid late fees, currently set at $93 for up to one month late and $387 for over one month late.
Changes that can be reported to ASIC include changes to officeholders' names, roles, or addresses.
2. Adding or removing an officeholder
ASIC's online services facilitate the addition or removal of officeholders through the electronic lodgement of Form 484 – Changes to company details.
Information you must have ready before notifying ASIC of changes, includes the company's ABN/ACN, as well as your account username and password.
To create an account, you will also need to register for online access using your corporate key. You can find your corporate key in the top right corner of your most recent annual statement. If you can’t find your most recent annual statement, you can apply online for a new corporate key.
Resigning officeholders can also personally notify ASIC using Form 370, taking control of the notification process, if they want to have the comfort of knowing their resignation takes effect without delay or there are any concerns that the company may not attend to this in a timely manner.
If a Form 370 is sent, the company does not also need to lodge a Form 484 in relation to that change.
3. Last director requirements
This section applies to private companies limited by shares (ie Pty Ltd companies) – not to public companies.
Unless a company is being wound up, the last director has died or never consented to their appointment as a director, that company must have at least one director. If a lodgement would result in the last director being removed, effectively leaving the company without a director, then the lodgement may be rejected by ASIC.
There may be circumstances where a replacement director cannot be appointed before the outgoing director leaves office. Section 203AB of the Corporations Act 2001 (Cth) accommodates this by providing that the resignation will be effective as long as another director is appointed the same day as the resignation (i.e. by the end of the day). This also applies in situations where multiple directors resign on the same day. In such situations, all the resignations will be ineffective unless at least one director remains or is appointed to the company at the end of the day.
4. Date of resignation
Since 18 February 2021, if a director resigns and ASIC is not notified of the resignation within 28 days, the effective resignation date will be the date that ASIC is notified. For example, if a director resigns on 1 March 2024 but neither the director nor the company notify ASIC until 1 August 2024, the resignation date will be recorded as 1 August 2024.
Failure to notify ASIC of a director resignation within the 28 day period could expose former directors to personal liability associated with obligations of the company (e.g. for tax and superannuation), or for claims against the company arising after the date of their actual resignation. Accordingly, it is important that resignations of directors are notified to ASIC within 28 days to ensure the actual resignation date is recorded.
It might be best for directors who have resigned to file an ASIC Form 370 themselves, instead of relying on the company to file a Form 484.
5. Fixing the resignation date after 28 days
If ASIC is notified of a director resignation after 28 days, it still might be possible to have the actual resignation date recorded but special application will need to be made either to ASIC or the Court.
To record the actual resignation date that is notified after 28 days, the director or the company may make an application to:
ASIC - by filing a Form 502 – Application to change the cessation date of a director, and providing reasons, within 56 days after the claimed resignation date. A fee will apply.
the Court – the application 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, you must lodge the order with ASIC using Form 105 – Cover page for office copy of a court order. You must lodge the 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.
In each case, if the application is accepted, the resignation date will be fixed as the claimed resignation date, subject to the last director requirements.
6. Remaining compliant
Establishing robust internal company processes and controls is essential for ensuring prompt notification to ASIC regarding officeholder changes. If it is not a task that can be promptly and adequately managed by the company or its secretary, it is prudent to engage a third party (for example, lawyer, accountant) to assist in managing the process.
For more information on your corporate responsibilities and how we can provide you with company secretarial support, please get in touch with our Corporate & Commercial team.