What You Need To Do As The Director Of A New Company

Becoming the director of a new company is exciting - you’re in the driver’s seat to shape strategy, build a great team and bring your vision to life.

It also comes with serious legal responsibilities under Australian law. The good news? With a clear checklist and the right documents, you can set up strong governance from day one and focus on growth with confidence.

In this guide, we’ll break down your core duties, the steps to structure your company properly, the governance you’ll need to implement immediately, ongoing compliance requirements, and the essential legal documents to put in place early.

What Does A Company Director Actually Do?

As a director, you have legal duties to the company, not just to yourself or individual stakeholders. These duties exist whether your company is brand new or established, and they apply to all directors (executive, non‑executive and founding directors alike).

Your Core Legal Duties

• Act in good faith in the best interests of the company: Your decisions must put the company first, not personal interests.
• Use care and diligence: Make informed decisions, read the paperwork, ask questions and document key choices.
• Avoid improper use of position or information: Don’t misuse your role or confidential information for personal advantage or to harm the company.
• Prevent insolvent trading: If the company cannot pay its debts when they are due, you must not allow it to incur new debts.
• Manage conflicts of interest: Disclose conflicts and follow your company’s processes for dealing with them.

These duties are practical as well as legal. They guide how you run meetings, approve transactions, appoint advisors, manage cash flow and communicate with shareholders and employees.

Are There Eligibility Requirements To Be A Director?

Yes. At least one director of an Australian company must ordinarily reside in Australia. Make sure you satisfy the Australian resident director requirements before appointment, and ensure ASIC records are kept up to date if directors change.

Set Up And Structure: Your First Legal Steps

Getting the structure right early will make compliance, fundraising and decision‑making much easier. Even if you’ve already registered the company, it’s worth checking you’ve covered the following.

Choose Or Confirm Your Governing Rules

Every company must be governed by either replaceable rules under the Corporations Act or a tailored Company Constitution. Most growing companies prefer a constitution because it lets you set clear rules for director appointments, share transfers, decision‑making thresholds and meetings.

As a director, make sure you can access your constitution (or confirm which replaceable rules apply), and align your board processes with those rules.

Check Director Appointments And Share Structure

• Director appointments: Confirm appointment processes, any probationary periods, and how removals occur under your constitution.
• Share structure: Review classes of shares, voting rights and any vesting terms (especially for founders and early employees).
• Share registers: Ensure the company maintains an accurate register of members and issues proper share certificates where required.

Banking, Records And Execution Of Documents

Open a company bank account and never mix personal and company funds.

Set up a secure system for board records, financials, contracts, cap table and ASIC filings. This can be a cloud folder with access controls and naming conventions, plus a board portal or shared minute book.

Know how to sign company documents correctly. Under section 127 of the Corporations Act, a company can execute documents without a witness if signed by two directors, or a director and company secretary, or the sole director/secretary (for single‑director companies). Getting this wrong can delay deals and create enforceability risks.

Governance And Decision-Making From Day One

Good governance isn’t just for large companies - it’s how startups move fast without losing control. Build these habits early.

Hold Your First Board Meeting

Within your first month, convene a board meeting to:

• Ratify director appointments and note any disclosures of interest.
• Adopt the company constitution (if not already adopted).
• Approve opening bank accounts and delegations of authority (who can sign what, and up to which limits).
• Approve initial contracts (e.g. leases, supplier agreements, employment offers).
• Schedule regular meeting dates for the year.

Capture decisions in written minutes or a formal resolution. For straightforward matters between meetings, many boards use written resolutions; a Directors’ Resolution Template helps keep these consistent.

Protect Directors With Appropriate Deeds And Policies

It’s standard to give directors access to company records and indemnification for liabilities incurred in the proper performance of their duties. Put in place a Deed of Access & Indemnity for each director and ensure your D&O insurance complements it.

Adopt core governance policies early - conflicts of interest, delegations, expenses and information handling - so expectations are crystal clear.

Document Decision-Making And Keep Registers

Maintain accurate registers (members, options, charges/security interests if applicable) and a central minute book. Well‑kept records are not just best practice - they’re your evidence that the board fulfilled its duties if anything is ever challenged.

Ongoing Compliance And Risk Management

Once the company is live, you’ll have a regular cadence of compliance tasks. Build a calendar to track these and assign responsibility.

ASIC And Corporate Compliance

• Company details: Keep ASIC informed of director changes, share issues or transfers, registered office changes and other updates within required timeframes.
• Annual statements: Review and pay annual review fees on time.
• Solvency: The board should regularly consider the company’s ability to pay debts as they fall due. Many boards record this by passing a solvency resolution at least annually (and more often if cash flow is tight).

Financial Controls And Cash Flow

Directors must ensure there are adequate financial controls. This usually includes delegated authority limits, dual approvals for payments, monthly management accounts, rolling cash flow forecasts and a process to escalate red flags quickly.

If you’re considering funding via a director loan, document it properly, set commercial terms and ensure you understand the tax and Corporations Act implications.

Contracts And Commitments

Before the company enters significant contracts, make sure they align with budget and strategy, and that risks are managed. Use your delegations policy to determine whether board approval is needed.

Key points to check: termination rights, liability caps, indemnities, IP ownership, data security and payment terms. For large or unusual contracts, get legal advice early - it’s far cheaper than unwinding a bad deal later.

Privacy, Employment And Workplace Obligations

If you collect personal information (for example, through a website or CRM), you’ll need a compliant Privacy Policy and processes that reflect what you say you do. Directors are accountable for setting the tone on data governance and security.

Hiring staff? Ensure you’re using clear Employment Agreements, paying correctly under any applicable award, and keeping proper records. As the business grows, board oversight of HR risk, safety and culture becomes more important.

Board Reporting And KPIs

Decide what the board needs to see each month or quarter: financials, runway, sales pipeline, key customer metrics, product roadmap, major risks and compliance updates. Consistent reporting helps you make informed decisions and demonstrate care and diligence.

The Documents Every New Company Should Have

Strong documents won’t slow you down - they enable faster, clearer decisions and reduce the risk of disputes. As a director, prioritise the following.

• Company Constitution: Sets out the rules for how your company operates, including director powers, meetings, share issues and transfers.
• Shareholders Agreement: Clarifies ownership, decision‑making, founder vesting, exits and dispute resolution. It’s one of the most important documents for any multi‑founder business.
• Deed of Access & Indemnity: Gives directors access to company records and appropriate indemnities in connection with their role, usually alongside D&O insurance.
• Directors Service Agreement: Outlines remuneration, duties, IP ownership, confidentiality and post‑employment restraints where a director is also an employee or executive.
• Board Resolutions And Minutes: Consistent templates for resolutions, agendas and minutes (including circulating resolutions) help you record decisions cleanly and accurately.
• Privacy Policy (and related data procedures): Required if you collect personal information; reflects how you collect, store and use data.
• Key Commercial Contracts: Customer terms, supplier agreements, SaaS or software licences, NDAs and IP assignments to ensure the company owns what it pays for and protects confidential information.
• Workplace Documents: Employment Contracts, contractor agreements and core workplace policies (e.g. code of conduct, WHS, leave, expenses, conflicts).

Signing And Storing Your Documents

Adopt consistent execution processes (e.g. signing under section 127) and maintain a single source of truth for fully executed copies. Version control matters - when in doubt, store the signed PDF and note where the originals are kept.

When To Refresh Or Upgrade Your Documents

Revisit your documents when you raise capital, roll out a new product, enter a new market, expand headcount, or restructure ownership. As a rule, significant change in risk or stakeholders means your paperwork should catch up.

Key Takeaways

• Your role as a director carries legal duties - act in good faith, use care and diligence, manage conflicts and prevent insolvent trading.
• Set the foundations early with the right structure, a clear Company Constitution and proper director appointments and records.
• Run effective governance from day one: hold initial board meetings, minute decisions, implement delegations and use circulating resolutions where appropriate.
• Stay on top of ASIC obligations, cash flow and solvency; consider recording a formal solvency resolution and review financials regularly.
• Put core documents in place early - a Shareholders Agreement, Deed of Access & Indemnity, board templates and a compliant Privacy Policy.
• Execute contracts correctly under section 127 and keep a secure, central repository of signed documents and registers.

If you’d like a consultation on your responsibilities as a new company director in Australia, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no‑obligations chat.