Running an Australian company with one director

Yes, an Australian proprietary company can have a single director. Section 201A(1) of the Corporations Act 2001 requires a Pty Ltd to have at least one director, and that director must ordinarily reside in Australia. So for a foreign-owned company, "one director" means one Australian-resident director and no overseas directors at all. That is legal, and it is the cheapest board you can have. It is also the most fragile, because one person's illness, resignation notice or unavailability can leave the company unable to act.

This guide covers the minimum-director rule, what a sole director can do alone, the special rules for a company whose sole director is also its sole shareholder, what happens on death or incapacity, and the case for a second director in a foreign-owned subsidiary.

The minimum: one director, ordinarily resident

Section 201A sets the floor:

• A proprietary company must have at least 1 director, who must ordinarily reside in Australia (s201A(1)).
• A proprietary company with one or more crowd-sourced funding (CSF) shareholders must have at least 2 directors. If there are only 2, at least one must ordinarily reside in Australia; otherwise a majority must (s201A(1A)).
• A public company needs at least 3 directors, at least 2 of them ordinarily resident (s201A(2)).

ASIC's officeholder page says the same in plain terms, and adds that proprietary companies don't need a secretary, officeholders must be at least 18, and directors must have a director ID before they are appointed.

The residency test is about where the director ordinarily lives, not citizenship. For who meets it, see who can be a resident director and resident director requirements.

Two kinds of one-director company

The Act treats these differently, and foreign founders often mix them up.

A foreign-owned subsidiary is almost always in the right-hand column. The shareholder is a company, and only an individual can be a director (s201B), so the same person can't be both. The constitution guide explains why this means the replaceable rules usually apply.

What a sole director can do alone

Board decisions

Under s248B, the director of a proprietary company that has only one director may pass a resolution by recording it and signing the record, and may make a declaration (for example, the solvency declaration in the annual review) the same way. Section 251A requires these to go in the minute book within 1 month, and the director must sign the minutes of a declaration within a reasonable time.

In a sole director and sole shareholder company, s198E(1) gives the director all the company's powers except those reserved to a general meeting, and its note gives examples: issuing shares, borrowing money and issuing debentures. Under s198E(2) that director can also sign negotiable instruments alone. In a subsidiary, the equivalent comes from the s198A and s198B replaceable rules, which give the same practical result for a one-director board.

Signing documents

Section 127(1)(c) lets a proprietary company with a sole director execute a document by that director signing alone, but only if the director is also the sole company secretary or the company has no secretary. If you appoint a separate secretary, documents need the director and the secretary. The signing rules, including electronic execution and deeds, are in signing documents from overseas.

Members' decisions

The sole director can't make decisions reserved to members, such as changing the constitution or the company name. In a subsidiary, those need the parent's signed resolution; see shareholder resolutions.

When the only director dies or loses capacity

Sole director and sole shareholder: s201F

Section 201F(2) deals with a person who is the only director and the only shareholder and who dies, or can't manage the company because of mental incapacity. Once a personal representative or trustee is appointed to administer their estate or property, that person may appoint a director, including themselves (s201F(4)). Section 201F(3) gives a trustee in bankruptcy the same power where the office is vacated because of the director's bankruptcy. A person appointed this way holds office as if appointed in the usual way (s201F(5)).

The catch is timing. Until probate, letters of administration or a guardianship order is in place, nobody may have the power to appoint, and the company has no one to operate bank accounts, pay staff or lodge with the ATO. Founders in this position should keep a will, an enduring power of attorney and clear instructions for the business.

Subsidiary with one director: the parent steps in

For a foreign-owned subsidiary, s201F doesn't apply, because the deceased director wasn't also the shareholder. Instead:

1. The company has no director from the date of death and is in breach of s201A.
2. The parent, as sole member, appoints a new director. Under the replaceable rule in s201G a company may appoint a director by resolution, and a single member does that by signing a record under s249B. Check the constitution, which may give the holding company a direct power of appointment by written notice.
3. The new director must have a director ID before appointment and must give the company a signed consent to act before being appointed (s201D).
4. The company notifies ASIC within 28 days of the appointment (s205B), and of the former director ceasing. ASIC's Form 484 page lists no fee for on-time lodgement. Late lodgement attracts late fees, which ASIC's fee schedule sets at $102 within one month and $428 after one month for 2026–27.

The practical problem is the gap. If the parent's board meets monthly, needs a translated resolution, or has to find and vet an Australian-resident candidate, the subsidiary can sit without a director for weeks. Banks may freeze mandates when they learn the only signatory has died, and payroll and supplier payments stop.

The last director can't resign

Under s203AB, a director's resignation doesn't take effect if, at the end of the day it would take effect, the company has no director, unless the company is in winding up. Section 203CA makes a members' resolution removing a director void in the same circumstances. A sole resident director whose client stops responding is therefore stuck in the role, carrying a director's duties for a company they can't control. The director resignation guide explains the options. It's a good reason for a resident director's engagement terms to require the owners to keep at least one other director on the board.

Risks of a one-person board in a foreign-owned subsidiary

• No continuity. Illness, travel, death or a dispute with the provider leaves the company unable to act.
• Concentrated personal exposure. The one director carries every duty under ss180 to 184, insolvent trading and the director penalty regime alone; see director duties. They will reasonably want more information and control.
• The parent has no seat. With no overseas director on the board, the group's management sits outside the board. Executives who direct the company anyway risk being treated as directors in fact; see shadow directors and parent control.
• Counterparty friction. Some banks and lawyers ask for two signatories for significant documents even where s127(1)(c) would allow one.

The usual structure is one Australian-resident director plus one or more directors from the parent group. It satisfies s201A, gives a two-director signing option under s127(1)(a), and means the company always has a director who can act if one leaves.

Alternate directors

If the concern is availability rather than numbers, the replaceable rule in s201K lets a director, with the other directors' approval, appoint an alternate to exercise some or all of the director's powers for a specified period. The appointment and its termination must be in writing, with a copy to the company, and ASIC must be notified within 28 days (s205B(2)). An alternate exercising the director's powers acts just as effectively as the director. Two cautions for one-director companies: s201K needs "the other directors' approval", which is awkward when there are none, so the constitution should deal with it; and an alternate is a director while acting, with the duties, director ID and residency questions that follow. An alternate doesn't fix a s201A breach if the principal director has left.

Where we fit

We provide Australian-resident directors for foreign-owned companies. Whoever you appoint, plan the board so the company still has a director who can act if one leaves, and agree in writing how a replacement will be found. See pricing for packages, or start here if you're setting up.

General information current at 28 October 2026, not legal advice. Get advice from an Australian lawyer on succession planning for a one-director company.

General information about Australian law and practice, not legal or tax advice for your circumstances. Check the official sources, or ask your adviser, before you act.