Following changes to corporate laws which started in February 2021, new restrictions came into effect on resignation of sole directors and backdating director resignation forms.
The changes are aimed at reducing the ability of directors to avoid liability for insolvent trading or other wrongful acts relating to their companies. The changes also seek to limit illegal phoenix activity where a company is left abandoned with no director and a new company set up to effectively run the same business.
A director cannot resign if it would leave a company with no directors. As a sole director, in order for ASIC to accept a resignation, you would need to locate a replacement director. If that is not possible, you are left to consider options to wind up the company.
The changes also try to prevent directors backdating resignation forms. Directors may try to backdate resignation forms by lengthy periods to try and avoid liability for actions happening in the company after their resignation date. Any resignation form must be sent to ASIC within 28 days of the date of the resignation. If the resignation date is longer than 28 days before ASIC received the form, ASIC will consider the resignation date to be the date that ASIC received the form.
If you need any assistance or advice regarding your role as a sole director and your options, please get in touch.