Nominee Director in Australia

This article explore the concept of a Nominee Director in Australia. Its process, responsibilites and services. Read the complete article.


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    Nominee Director in Australia
    Running a successful business may be a difficult endeavor, particularly when dealing with the complexity of corporate law, laws, and compliance. Having a resident director is a key need for every firm in Australia, and failing to achieve this requirement may have significant implications. But what if you aren’t a citizen of the nation in which you operate? This is when a nominated director might come in handy. A nominated director overcomes the residency issue by choosing a resident director to represent you.  These services may also provide access to local knowledge, decreased administrative load, and greater reputation. In this post, we’ll look at what a nominee director is, the advantages and cons of hiring one, and the conditions in which hiring one might be useful. Understanding the function and consequences of a nominee director is crucial to accomplishing your business objectives in Australia, whether you’re a small company owner, a significant shareholder, or a director wishing to broaden your board’s knowledge.

    What is a Nominee Director in Australia?

    A Nominee Director In Australia is someone appointed by a company to act as a director on its behalf, as provided under the Corporations Act 2001. The nominated director is appointed to the board of directors, but they solely work for the party or parties who chose them and have no executive or decision-making power. Nominee directors, sometimes known as shadow directors in Australia, are commonly used by foreign corporations or investors seeking to establish a presence in Australia but lacking a local director or unwilling to appoint a director with full decision-making powers. The nominee director service assures compliance with local rules and regulations by providing an essential legal presence in Australia. They are not involved in the day-to-day operation of the firm, but they do have legal duties and obligations under the Corporations Act. They must operate in the best interests of the organization, exhibit care and diligence, and ensure that all applicable rules and regulations are followed. Failure to meet these commitments may have legal and financial ramifications for both the candidate director and the appointing party.

    Responsibilities of Nominee Director in Australia

    The list of responsibilities of the Australian Nominee Director are:
    • Act with Good Faith: A director is required to act in good conscience in the interests of the business and in a purposeful manner.
    • Avoiding Conflicts of Interest: Directors should avoid circumstances in which their interests could clash with those of the firm. A disagreement must be declared and dealt with properly.
    • Exercise Care and Diligence: Directors must utilize their powers and discharge their obligations in the same way as any reasonable person would.
    • Do Not Misuse Information or Position: A director may not use their position for personal gain or that of others, or to harm the company. They must also not use the information that they obtain in their role as director to the same ends.
    • Preventing Insolvent Trading: Directors must prevent the business from trading if it is insolvent.
    • Complying with the Corporations Act: Includes several obligations such as making sure the company maintains proper financial records and files financial statements and reports.
    • Act for the Company’s Best Interests: Although the nominee director was appointed by an individual or company, they are required to act in the interests of all the employees of the organization, not just those of their appointed person.
    • Disclosure: All directors, including nominees, are required to disclose any personal material interest in a company-related matter.

    Process of Appointing a Nominee Director in Australia

    An Australian nominee director is appointed by a systematic process:
    • Consent: Before appointing the nominee director, that individual must give written consent.
    • Board resolution: Typically, the company’s board passes a motion to nominate the director nominee.
    • Notification of ASIC: Within 28 days after the appointment, the company is required to notify ASIC (Australian Securities and Investments Commission) using the prescribed form.
    • Shareholder approval: In some cases, the shareholders’ approval may be needed.

    What is an Australian resident director?

    Australian resident directors are corporate directors who are tax and legal residents of Australia. According to the Corporations Act of 2001, every Australian corporation must have at least one director who is either an Australian citizen, a permanent resident of Australia, or has a special visa that permits them to serve as a company director. An Australian resident director’s responsibility is to give strategic leadership and supervision to the business, as well as to guarantee compliance with legal and regulatory obligations and to act in the best interests of the firm and its stakeholders. They make decisions on the company’s operations, financial management, corporate governance, and risk management, and any violations of the law could result in personal accountability. Remember that resident director does not have to be actively engaged in the company’s day-to-day activities, but they must be ready to fulfill their obligations when needed. If a corporation is unable to satisfy the need for a resident director, it may need to hire a professional director to fill this role.

    Difference between a Resident Director and a Nominee Director

    Both a resident director and a nominee director are kinds of corporate directors, although their functions and responsibilities vary.
    Feature Resident Director Nominee Director
    Definition A director who resides in the country where the company is incorporated. A director is appointed to fulfill the statutory requirement of having a local director.
    Purpose To provide local expertise and knowledge to the company. To meet the legal requirement of having a local director.
    Role Actively involved in the day-to-day management of the company. Typically has a non-executive role and does not participate in the day-to-day management of the company.
    Authority Has full authority to make decisions on behalf of the company. Has limited authority and typically acts on the instructions of the company’s shareholders.
    Liability Liable for the company’s debts and obligations. Liable for the company’s debts and obligations, but may have a limited liability agreement in place.
    Residency Must reside in the country where the company is incorporated. Must reside in the country where the company is incorporated.
    Citizenship Can be a citizen of any country. Must be a citizen of the country where the company is incorporated.

    Australian Nominee Director Services

    Some of the services offered by Nominee Director in Australia are:
    • Complying with Australian Law: Nominated directors are responsible for making sure that the company adheres to all Australian laws and regulations. This includes filing annual accounts, paying taxes, and maintaining proper records.
    • Local expertise and knowledge: Nominated directors can provide valuable insight into local business practices and customs. This is especially useful for foreign companies who are not familiar with the Australian market.
    • Less administrative burden: By attending to tasks like filing paperwork and attending meetings, nominee directors can reduce the administrative load on foreign companies.
    • Increased credibility: A resident Australian on the board can improve the credibility and reputation of the company in Australia. This is useful for companies who are interested in doing business with Australian government agencies or companies.


    An Australian nominee director is a director who is appointed to a company’s board on behalf of another person or organization. While the notion of a nominee director is acknowledged, it is critical to realize that the nominee director bears fiduciary responsibilities to the business rather than the person or organization that selected them. This implies that the candidate director must operate in the best interests of the firm, even if those interests clash with those of the party selecting him or her. In Australia, the Corporations Act 2001 (Cth) controls the roles and obligations of directors. All directors, including nominee directors, are obliged by this Act to use their powers and fulfill their responsibilities with care and diligence, in good faith, and in the best interests of the company. They must also avoid conflicts of interest and not abuse their position as directors or the information they receive.


    Yes, a non-resident can be a director in Australia.

    The Australian Nominee Director costs around A$2,000 per month.

    To be eligible for the job of business director, you must be at least 18 years old and agree to accept the role and responsibilities of a director. Before being appointed as a director, you must offer your written permission in writing.