{"id":270665,"date":"2024-07-08T15:48:24","date_gmt":"2024-07-08T03:48:24","guid":{"rendered":"https:\/\/www.reckon.com\/au\/?post_type=sbh&p=270665"},"modified":"2024-07-08T15:48:24","modified_gmt":"2024-07-08T03:48:24","slug":"what-is-role-director-company","status":"publish","type":"sbh","link":"https:\/\/www.reckon.com\/au\/small-business-resources\/starting-a-small-business\/what-is-role-director-company\/","title":{"rendered":"What is the role of a director in a small business company?"},"content":{"rendered":"

[et_pb_section fb_built=”1″ custom_padding_last_edited=”on|phone” _builder_version=”4.23″ custom_padding_tablet=”” custom_padding_phone=”0px||||false|false” locked=”off” global_colors_info=”{}”][et_pb_row column_structure=”1_3,2_3″ _builder_version=”4.23″ background_size=”initial” background_position=”top_left” background_repeat=”repeat” width=”100%” custom_padding=”||0px||false|false” global_colors_info=”{}”][et_pb_column type=”1_3″ module_class=”table-contents” _builder_version=”4.23″ background_color=”#f3f2f6″ custom_padding=”25px||25px||true|false” sticky_position=”top” sticky_limit_bottom=”section” sticky_position_tablet=”top” sticky_position_phone=”none” sticky_position_last_edited=”on|desktop” pac_dcm_carousel_specific_module_num=”0″ border_radii=”on|24px|24px|24px|24px” global_colors_info=”{}” custom_padding__hover=”|||”][et_pb_text _builder_version=”4.23″ text_font=”||||||||” global_colors_info=”{}” background__hover_enabled=”on|desktop”][\/et_pb_text][\/et_pb_column][et_pb_column type=”2_3″ _builder_version=”4.16″ custom_padding=”|||” pac_dcm_carousel_specific_module_num=”0″ global_colors_info=”{}” custom_padding__hover=”|||”][et_pb_text admin_label=”Copy paste body text here” _builder_version=”4.23.1″ header_2_font_size=”32px” header_2_font_size_tablet=”30px” header_2_font_size_phone=”26px” header_2_font_size_last_edited=”on|tablet” global_colors_info=”{}”]<\/p>\n

What is a director in a company exactly? What is their role? How does it differ to the role of a CEO or managing director?\u00a0<\/span><\/p>\n

As a small business owner, what do you need to understand about the role of a director?<\/span><\/p>\n

What is a director of a company?<\/span><\/h2>\n

The director of a company is the person responsible for managing a company\u2019s business activities. Larger companies will have multiple directors working as a collective to manage or advise a company \u2013 usually referred to as a board of directors<\/span><\/p>\n

Does a small business need a board of directors?<\/span><\/h2>\n

While you may run a small business that doesn\u2019t mean you escape the need for a director. Regardless of the size of your company, every company needs at least one director, not necessarily a board of directors.\u00a0<\/span><\/p>\n

The Australian Securities and Investments Commission (<\/span>ASIC<\/span>) insist that a\u00a0<\/span>proprietary company<\/span><\/a>\u00a0must have at least one director who ordinarily resides in Australia. A proprietary company is only expected to have one director, but a public company must have at least three directors.<\/span><\/p>\n

Most small businesses are proprietary companies, so just the one director is required, but every company must also have at least one member. A member is generally referred to as a shareholder. A director can also be a member of the company, which is common with small companies.<\/span><\/p>\n

ASIC firmly state that a person serving as a director must \u201cact in the best interests of the company, even where this may conflict with their own personal interests\u201d. Members of a company are generally free to act in their own interests.<\/span>
<\/span>
<\/b>As cited through the\u00a0<\/span>Corporations Act of 2001<\/span><\/a>, company directors have the following legal obligations and duties:<\/span><\/p>\n