It has been discussed for some years now, but the Treasury Laws Amendment (Registries Modernisation and Other Measures) Bill 2019 is finally before Parliament and in fact, is currently before the Senate.
The aim of the Bill, in part, is to introduce director identification numbers and reduce phoenixing activity. Phoenxing activity occurs when, as the Bill states, “controllers of a company deliberately avoid paying liabilities by shutting down an indebted company and transferring its assets to another company”. Creditors and employees are the big losers when phoenixing occurs.
DIN will be unique to each director and a person retains the number even when they cease being a director. The hope is that this will reduce the use of fictitious directors, but also enable the (failed) activities of directors to be more easily traced. In turn, it is hoped that regulators and administrators will be able to more easily investigate suspected illegal activities.
The other significant change this Bill brings is an attempt to collate 35 business registers into one new Commonwealth business registry regime. The existing registers to form part of this include, to name a few only:
- ACN register
- Business names register
- Australian registerable bodies
- Reserved names registered
- Managed investment scheme register
- Credit registers
- Register of disqualifying company directors and officers
- Register of financial advisers
- Register of auditors
- Register of approved SMSF auditors
- Register of insurance brokers
Again, this change will make it easier to track and search for information and make some aspects of corporate activities more transparent.
The Bill was before the Senate for a second reading on 13 February. Parliament isn’t due to sit again until August so it looks like we will have to wait until later in the year to find out if this big change gets approved.
Please contact us for more information on how these changes impact on your organisation.