NEW DIRECTOR RESIGNATION RULES

Section 203AA of the Act (“Act”) provides that a Resignation of a Director will now take effect:

• If, within 28 days after the day the person stopped being a Director of the
  Company, ASIC is notified of that fact, the day the person stopped being a Director of the Company; or
• In any other case – the day written notice is lodged with ASIC stating that the
  person has stopped being a Director of the Company.

If the Director’s resignation is notified to Australian Securities and Investments Commission (“ASIC”) after 28 days of the day the person stopped being a Director, the resignation date will be taken to be the date that the written notice is lodged with ASIC.

Under the Act a person may apply to ASIC or a Court to fix a different resignation day. The authority to alter a resignation date is optional, must be made within a limited timeframe, and any decision is to be determined by a case-to-case basis.

A Director’s resignation will not take effect if the resignation will leave the Company with no Directors on ASIC records, unless a Company is being wound up or other general exceptions such as death of the last director, or where the person did not consent to act as Director.

The new changes are aimed to prevent Directors resigning before the Company is Liquidated. Not all Directors’ resignations will be accepted if it results in the Company having no Directors remaining, the Company must at all times have at least one Director.

All Directors will need to be fully aware of their obligations and potential liabilities as a Director and the timing with which they choose to resign.