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There is nothing in the Corporations Act which prevents a non-resident from being a director of an Australian company. However, section 201A Corporations Act states that a proprietary company must have at least 1 director and they must ordinarily reside in Australia. This is generally interpreted to mean if a company has more than 1 director, at least 1 of those directors must ordinarily reside in Australia.
The term "ordinarily reside in Australia" is not specifically defined in the Corporations Act so would take its normal meaning. In practice, we would generally refer to the ATO guidance on the concept of “resides”.
According to the ATO, the quality and character of an individual's behaviour while in Australia assist in determining whether the individual resides here. In particular, the following factors are useful in describing the quality and character of an individual's behaviour:
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intention or purpose of presence;
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family and business/employment ties;
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maintenance and location of assets; and
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social and living arrangements.
No single factor is necessarily decisive and many are interrelated. The weight given to each factor varies depending on individual circumstances.
Please note that the ASIC can impose penalties if no director is ordinarily resides in Australia.
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