Every Director will need to register to receive a unique Director Identification Number (DIN) – expected to come into effect early 2021. The new system has been introduced to tackle phoenix activity and drive more efficient and cost-effective insolvencies. Any directors and companies not complying with the new regime may face criminal and civil penalties. There will be a 12-month transition period where:
- existing directors will need to register within the period prescribed on the announcement
- new directors will need to register within 28 days of their appointment
After this transition period ends, new directors must apply for a DIN prior to being appointed. The DIN regime will also extend to directors of foreign companies registered in Australia.
Directors should also ensure they’re aware of the Safe Harbour Framework and understand the options for turnaround strategies. While directors have been given a six-month reprieve from any personal liability for trading while insolvent, this is not a ‘free pass’
If you have any queries please contact the HCG team for assistance.