From today, 5 April 2022, company directors need to apply for a director ID number before they are appointed to a company. This means that directors can’t use fraudulent identities or be involved in multiple failed businesses without being identified. It only takes 5 minutes (if you can remember your myGovID password).
This is the most recent change to come into effect with other amendments to the Corporations Act focused on combating illegal phoenix activity.
You might recall that amendments were made from 18 February 2021 aimed at preventing directors from backdating resignations and stopping a director from resigning if they are the last director.
Where a director’s resignation would result in a company not having any directors, the resignation does not take effect. This has the potential result of resignation races in an attempt to avoid liability.
The only way to get around that law is to die which seems extreme.
Lesson? Keep your eyes firmly on the books and make sure you are discharging your director duties. If you can’t, seek legal and accounting advice immediately
