The roles and responsibilities of a Resident Director, Public Officer and Local Agent

It can be confusing to comprehend the finer differences between a resident director, public officer and local agent when setting up a business in Australia. However, it’s important that you understand their functions, to ensure you don’t fall foul of regulations regarding the roles and responsibilities an Australian company must fill.

Read our short guide to help you to understand each role:

Australian Resident Director

The Australian Securities and Investments Commission (ASIC) stipulates that all private companies registered in Australia must have a local Australian resident appointed as a director of the company at all times.

The be eligible, a director of a company must:

• Be at least 18 years of age
• Ordinarily reside in Australia
• Consent to taking on the role and responsibilities of a director.

A proprietary company (Pty) must have at least one director.

A public company must have a minimum of three directors, with at least two ordinarily residing in Australia.

Responsibilities

A resident director holds a significant role in the success of a business and is responsible for supporting and ensuring compliance of an Australian business. The director must have financial and business skills to ensure financial records and reporting requirements are complied with and that adequate financial systems are in place for all accounting activities.

They must ensure:

• They liaise with regulatory authorities, government agencies and financial institutions
• They manage their annual compliance obligations such as ASIC registrations and changes, and all ATO tax compliances.

Under the director penalty regime, directors can become personally liable for:

• Unpaid PAYG withholding amounts
• Unpaid superannuation guarantee charge obligations. (These are applicable from the June 2012 or later quarters).

Public Officer

The role of the public officer is to be the Company’s representative to the Australian Tax Office (ATO) and to take responsibility for the Company’s obligations under the Income Tax Assessment Act 1936.

A public officer can be appointed at the company registration date, or one can be nominated within three months of the company’s commencement date of registration.

Be aware that fines of $110 per day exist for a business that does not have a public officer appointed.

A thorough knowledge of accounting and tax obligations is essential for this role, as the public officer will need to ensure that the company is registered with the appropriate authorities and all required taxes are being paid.

Responsibilities

The public officer is responsible for everything that is tax-related in regards to the company. If the company is in default, the public officer is liable to these same penalties, however they are not liable for the payment of tax due by the company.

Local Agent

If a company is registered outside Australia, then it must always have a local agent (Australian) formally appointed.

A company would not have a resident director and a local agent – it either has a local director, if an Australian incorporated company, or a local agent, if a foreign company doing business in Australia.

Also known as a power of attorney, the local agent must:

• Be a natural person or company
• Be resident in Australia
• Be authorized to accept services of notices and processes on behalf of the foreign company.

To appoint a local agent, Form 418 must be drawn up to include the name, address and appointment date of the local agent. This must be kept up to date and any changes must be communicated to the ASIC.

Local agents will charge a fee to act as an agent on behalf of the foreign company and must maintain a registered office in Australia. They may require a foreign company to indemnity them and may ask that the company provides security in favour of the local agent.

Responsibilities

The local agent of the registered foreign company is:

• Responsible for any obligations the company must meet
• Could be liable for any breaches or penalties

How we can help

If you feel you would benefit from further advice and guidance in relation to resident directors, public officers or local agents, then please get in contact with TaxAssist Accountants. We are here to help with all of your tax, accounting and advisory needs and we offer a free, no obligation initial consultation. Call us on today on 02 9608 3707 or enquire here.

Date published 23 Mar 2022 | Last updated 9 Jul 2022

This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.