News

Resigning as a Director? Don’t be late or the last

March 4th, 2021

From 18 February 2021 changes to the Australian Law were introduced by the Treasury Laws Amendment (Combating Illegal Phoenixing) Act 2020 meaning that:

if a director’s resignation is not notified to ASIC within 28 days, the resignation will take effect on the date of notification; and
a director’s resignation will be rejected if it leaves the company with no director.

The legislation is one of a raft of measures aimed at preventing illegal phoenixing – stripping a company of assets and starting another in its stead (the phoenix). Other more substantive reforms are already in place but these recent procedural changes will affect all directors, not just those involved in creditor-defeating restructures.

Company Director Resignation

ASIC must be notified within 28 days of a director’s resignation. Previously, a failure resulted in a late fee; now the consequence will be that the director’s resignation date will be recorded as the date of notification to ASIC. ASIC will override the actual date of resignation with the lodgement date. This change is to prevent improperly ‘backdating’ a resignation to avoid director liability.

Regardless of their actual resignation date, directors will now be deemed to have continued as a director until the notification date, and will be responsible for actions taken by the company during that time.

An application may be made to ASIC or the court to fix a different resignation date. This is discretionary and there are time limits for the application.

Resigning directors should make sure that their company lodges notice of resignation on their behalf, or lodge directly themselves to make sure their tenure is accurately recorded.

Last Man (or Woman) Standing

A director’s resignation will now be rejected by ASIC if, at the end of the day on which a director resigns, there will be no other directors of the company. This measure is designed to prevent directors resigning to avoid the consequences of company insolvency.

Directors should be mindful of this where there is an internal dispute or financial difficulty.

For more information or legal advice about your role as a company director, please contact Miller Harris.

Businesses beware! Business name renewal invoice scams

May 21st, 2020

Many business owners carry on business using a registered business name. Registered names need to be renewed from time to time. Private company service providers now have access to the business names register information, and some offer “renewal services”. Unfortunately, some of these service providers are sending business owners “renewal notices” which look very much like official renewal notices or invoices from the registry, and call for payment more than double the fee to renew directly with ASIC. No doubt they hope that businesses will simply put the “renewal notice” into their payment systems without question.

You do not have to pay for renewal through these service providers.

It is cheaper and just as easy to renew through ASIC.

Renewing your business name through ASIC is cheap, easy and quick. You can visit their website at asic.gov.au.

ASIC sends a business name renewal notice at least 30 days before your renewal is due. We recommend that you bin all other renewal notices received from anyone other than the ASIC.

ASIC provides the option of renewing your business name for either:

one year, which costs $36.00; or
three years, which costs $85.00.

Other service providers charge more than double the amount required by ASIC. Please contact us if you are uncertain whether an invoice from a service provider is legitimate or not.

Do you need a business name?

You are required to register a business name if you are trading under a name that is different from your own name or your company’s name.

It is important to have a business name which is currently registered. Carrying on business under a name which is not your own name, and not registered as a business name, is an offence. It is also possible that someone else might register the name which you are using, leading to confusion and disputes.

If you have any questions concerning the operation of your business, please do not hesitate to contact our experienced team on 07 4036 9700.

Wishing you all the success for your business!