Company director ?

Just out of my curiosity, can a company's director be another company ?

ie, can a company director not a natural person ?

 

Nope

 

Not in Australia, but in some other countries - yes. I had fun once registering a Spanish company for GST in Australia which had another company as a director. If you have ever had the unfortunate experience of needing to comply with the ATO's onerous proof of identity requirements for non-residents you will know what I mean.

 

I just picked up a book on the panama papers which is very interesting. The law firm was getting locals to act as nominee directors for others for a fee. Ine woman was director of over 3000 companies.

 

A director of over 3000 companies! Holy crap...if they are Australian companies I wonder if she was aware of the significant personal liabilities that an Australian director carries? Clearly not if she's the director of 3000 companies.

 

She was apparently a poor person who was earning just $400 per month. The law firm paid her $500 per month for this and then charged their clients over $500k pa for the services of supplying a director.

 

There are people in Australia who do this. Typical case is where an overseas group wants to set up an Australian subsidiary. You need an Australian director to comply with the Corporations Act. The Australian acting as a director will require a deed of indemnity with the parent company and/or their D&O insurance paid to mitigate against any personal liability.

 

yes, but you are still liable for prosecution if you don't meet your responsibilities as a director. don't know about you, but despite being given an indemnity from a company (which will only cover any financial loss and cannot be used to abdicate your legal responsibilities as a director) there is no way i would agree to act as a proxy director for a company that i didn't really know what it's business was or particularly the director of a company that is merely being used to funnel funds to avoid tax. you may have an indemnity, but you are still liable to be prosecuted for failure to meet your legal responsibilities as a director. this prosecution could in some instances be criminal charges.

 

It's definitely risky business and not something I would do but I know it pays well for those doing it. Risk v reward

 

And this guy complained : linky

 

Yes extremely risky as you could be personally liable for certain company debts. An indemnity may be meaningless unless it is a big international company giving it.

 

Even without the directorship, an ABN is required before some items can be registered/sold in Australia.

Exactly the same (shell companies) services are offered from Australia as Panama, for the sole purpose of allowing a foreign entity to place their products in Australian markets.

Just that the reason in Australia is Protectionism/safety rather than financia/tax avoidance and penalties less severe.

Having said that, if handled under proper legal advise, it is possible to eliminate/transfer the risk.