Residency of the directors

All applications for company registration through ASIC or through ASIC agents contain question that asks about the residential status of the directors.
 

Section 201A of the Corporations Act 2001 requires that at least one director of a proprietary company and at least 2 directors of a public company should ‘ordinarily reside in Australia’. Ordinarily residing in Australia clearly means an Australian residential address at which they usually dwell.
 

A person is considered to be an ordinary resident if:
 

1. They have actually been in Australia during 200 or more days in the prior 12 months, and
2. At the time in question either, the person is in Australia, and their continued presence in Australia is not subject to any time limitation imposed by law, or
3. The person is not in Australia but, immediately before their most recent departure from Australia, their continued presence in Australia was not subject to any legal limitation.

With respect to the Bankruptcy Act the following criteria is useful in establishing a director’s residency:
 

1. The degree of permanence of the person’s residence in Australia (Rather than a place where the individual stays only casually).
2. Where the ordinary course of the person’s life regularly occurs.
3. Whether the person has a dwelling in Australia.
4. If the person has left Australia, for how long do they intend to stay outside.
5. Whether are employment arrangements creating a link between the person and Australia.

Whether a director is an ordinary resident is a matter of fact and degree. However, a director should give careful consideration to the above factors when portraying themselves as being ordinary resident in Australia.