• Enterprise Legal - Recent Changes to Corporations Act Significantly Impact Timing for Director Resignations

    In February 2020, changes were made to the Corporations Act2001 (Cth) which significantly impacted the date on which Company Directors were deemed to have resigned. A 12-month transition period was implemented following these changes, which meant that as of 18 February 2021 these changes now apply in practice.

    The timeframe for which a Company must notify ASIC of any resignation of a Director remains at 28 days after the resignation, however the new changes mean that if the Company does not give notice to ASIC (by lodging a Form 484) within that time period, the relevant Director will be deemed to have resigned on the date that ASIC actually receives the Form 484 (which could well be a date that is long after when the practical resignation took effect).

    Prior to these changes, a failure to meet this timeframe resulted in the Company being required to pay a fee for the late notification, but didn’t negatively affect the resigning Director. In those circumstances, the task of notifying ASIC was generally left with the Company’s Accountant to carry out and the resigning Director didn’t usually have any cause for concern about whether the timeframe was met. This was because the Company was typically required to pay the late notification fee (not the resigning Director) and the resignation took effect in accordance with whichever date was specified in the notification (which means the resignation could be ‘backdated’ appropriately).

    Moving forward, resigning Directors should now carefully consider what steps they can take, to ensure that notification is given to ASIC by the Company within the required timeframe. This will allow the resigning Director to ensure their resignation takes place on the relevant date, importantly ensuring that the Director does not unintentionally remain liable in their role as a Director of the Company.

    Some recommended steps that a resigning Director could take, are to take on the onus of lodging the Form 484 (where practical) or to include additional clauses in share sale documentation (or other agreements which deal with the Director’s resignation) to impose a positive obligation on the Company to lodge the form within the required timeframe, with penalties, indemnities and releases to follow until such time as the Form 484 is submitted.

    Do you need assistance with company restructuring or officeholder resignations? Contact our expert Business Law team, led by Principal Director & Legal Advisor, Peta Gray. 

    ☎️ (07) 4646 2621

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  • Director Identification Number Scheme | Enterprise Legal

    What It Is

    On 1 November 2021, the Australian Business Registry Services (ABRS) introduced a requirement for directors of relevant companies to obtain a Director Identification Number (Director ID).

    A Director ID is a unique, fifteen-digit identifier given to a director of a company who has completed an application and verified their identify with the ABRS.

    A director must personally apply for their own Director ID (and it is is free to apply) and will only ever have one Director ID, regardless of how many companies or similar entities they are a director of.

     

    Who It Applies To

    Any person who is currently appointed as a director or alternate director of a company, registered Australian body, registered foreign company or Aboriginal and Torres Strait Islander corporation must apply for a Director ID.

    You can apply for a Director ID even if you are not currently a director, and it will stay with you for life and can be used if you do ever become a director.

     

    When You Need It

    The below table provided by the ABRS succinctly sets out the timeframes for application for a Director ID:

    Director ID Scheme – ABRS Timeframes

     

    How To Apply 

    All Directors must make their own applications – unlike other arrangements for company documents your accountant or registered tax agent is not permitted to do this for you.

    In order to apply for your Director ID, you will need to go to the ABRS Website and follow the process to download the myGovID app (this is different to myGov). The direct link is Apply for your director ID | Australian Business Registry Services (ABRS).

    As part of the application process, you will need to complete a verification of identity, so before you apply you should gather the following information/documents:

    1. your tax file number (TFN);
    2. your residential address as held by the ATO; and
    3. information from two (2) documents to verify your identity – the relevant documents that ABRS suggest are:
      1. bank account details;
      2. an ATO notice of assessment;
      3. superannuation account details;
      4. a dividend statement;
      5. a Centrelink payment summary; or
      6. a PAYG payment summary.

    If you are unable to apply online, you can apply by phone or by paper form, but you will still need the above information / documentation.

     

    How Enterprise Legal Can Help

    Although we are unable to complete the application for you, we are available to assist you with any questions or concerns you have regarding the Director ID, including whether it applies to you, when you need to make an application by, and any questions about how the application works or the best application method for you.

     

    Contact Enterprise Legal's expert Business Law team today:

    ☎️ | (07) 4646 2621
    ✉️ | Submit an Online Request